Trump, in Bob Woodward interview, said he played down coronavirus’ severity
In Today’s Updates
* USDA daily export sale: 195,000 MT of soybeans to China during MY 2020-2021
* U.S. weekly jobless claims total 884,000, vs 850,000 expected
* U.S. recovery has been surprisingly solid and durable
* China’s corn futures traded at a 5-year high last night
* Gold held support at the 50-day moving average
* U.S. lumber futures continue to tumble
* Brazil temporarily scraps tariff on rice imports
* First German case of ASF
* British pound extends seven-day losing streak vs dollar and euro
* Euro is up 10% against the dollar since March
* Kansas City Southern rejects roughly $20 billion takeover offer
* Report: Climate change poses major risk to financial stability
* Bloomberg joins Reuters in reporting Trump plans to reject biofuel waivers
* Senate vote today on whether to advance slimmed-down GOP pandemic relief bill
* USDA sets Seafood Trade Relief Program (STRP) details; signup starts Sept. 14
* China debates cutting U.S. access to drugs
* Phase 1 trade deal collapse ahead?
* Chinese wheat farmers hoarding on expectations of rising prices
* House panel hearing to air Xinjiang force labor concerns
U.S. food & beverage industry update:
* Walmart takes another page from the Amazon playbook
* 10 food trends for the next decade: Family dinners, less booze and more
Update on re-opening America... and around the world:
* NFL kicks off its 101st season tonight
* NYC to allow indoor dining at restaurants at limited capacity starting Sept. 30
* New U.S. coronavirus infections fell by almost 13% over the past week
* 513,415 children and teens in the U.S. have tested positive
* AstraZeneca could restart its clinical trials as soon as next week
* How many planes are needed to deliver a coronavirus vaccine?
* U.K. will place new limits on social gatherings
* Trump admits to concealing the true threat of coronavirus in new Woodward book
* Only 14% of Americans think vaccine widely available before Nov. 3 elections
Politics & Elections:
* Biden proposes some new taxes
* Possibility of USTR Lighthizer staying in office a few months if Biden is elected?
Other Items of Note:
* Some Democratic-led states sue on Trump’s Arctic refuge drilling plan
* Durbin introduces conservation corps bill
* USTR seeking public input on trade barriers to U.S. exports of goods and services
Equities today: The Dow opened up just over 100 points higher. Overnight, the MSCI Asia Pacific Index added 0.7% while Japan's Topix index closed 1.2% higher. In Europe, the FTSE 100 Index led losses on fears that Brexit talks are falling apart. The Stoxx Europe 600 Index dipped 0.5%.
U.S. equities yesterday: The Dow closed with a rise of 439.58 points, 1.60%, at 27,940.47. The Nasdaq jumped 293.87 points, 2.71%, at 11,141.56. The S&P 500 added 67.12 points, 2.01%, at 3,398.96.
On tap today:
• European Central Bank releases a policy statement at 7:45 a.m. ET, and ECB President Christine Lagarde holds a press conference at 8:30 a.m. UPDATE: The ECB left lending rates unchanged and made no changes in the bond buying program.
• U.S. jobless claims for the week ended Sept. 5, due at 8:30 a.m. ET, are expected to fall to 850,000 from 881,000 a week earlier.
• U.S. producer price index for August, due at 8:30 a.m. ET, is expected to rise 0.2% from the prior month.
• U.S. wholesale inventories for July, due at 10 a.m. ET, are expected to fall 0.1% from a month earlier.
• Bank of Canada Gov. Tiff Macklem speaks to the Canadian Chamber of Commerce at 12:30 p.m. ET.
U.S. weekly jobless claims total 884,000, vs 850,000 expected for week ending Set. 5. Claims have fallen from a March peak of about 7 million but remain at historically high levels — above the pre-pandemic record of 695,000. The number of workers collecting state unemployment benefits has also dropped from highs reached earlier in the pandemic.
U.S. recovery has been surprisingly solid and durable, powering through resurgent infections and the expiration of enhanced unemployment benefits. The main reason is that the economy has continued to reopen. But reopening, and growth, will be more of a slog in coming months, the Wall Street Journal notes. One reason is the impasse over more fiscal stimulus: Congress has yet to agree on an extension of enhanced unemployment benefits or more support to businesses. Another is that the easy gains from reopening are behind us.
• USDA daily export sale: 195,000 MT of soybeans to China during MY 2020-2021
• China’s corn futures traded at a 5-year high last night. Fear of crop losses in China due to the typhoon may increase their corn imports, analysts note.
• Gold held support at the 50-day moving average.
• U.S. lumber futures continue to tumble.
• Brazil temporarily scraps tariff on rice imports. Brazil’s economy ministry decided to eliminate import taxes on rice through Dec. 31. The move applies to suppliers outside the Mercosur trading bloc and is meant to ease food price inflation.
• First German case of ASF. Germany has confirmed the detection of African swine fever (ASF) in a wild boar near its border with Poland, Julia Kloeckner, the country’s ag minister, said at a press conference yesterday. The country is stressing the “principle of regionality” in the case, emphasizing that a farm animal was not involved. The country is concerned that importers of pork could respond with blanket bans. Kloeckner says the German government was in contact with China, as Germany does not have a formal agreement with China about the disease. South Korea has already responded by banning German pork imports. Germany is a major EU pork exporter, shipping 158,000 MT of pork valued at around $501.6 million to China from January to April of this year. Poland has been dealing with ASF for some time.
• British pound on Wednesday fell against the euro and the dollar, extending a seven-day losing streak that is the currency’s worst percentage decline since the coronavirus market crisis in March. Concern is mounting over the prospective economic pain from the U.K.’s political divorce from the European Union. The U.K. officially left the EU in January, but all trade rules were kept in place through the end of this year so a permanent trade pact could be worked out. An agreement looks less likely after British officials signaled they won’t compromise on some demands and would be happy to break off trade without a new deal in place. British logistics companies are warning that new full border controls would trigger delays and confusion. U.K. shippers would also face higher trade costs without a new trade deal in place. Without an agreement, nearly $1 trillion in trade could be thrown into chaos at the beginning of the year, but some say the "game of Brexit chicken" may be part of the negotiating strategy. Adding to the turmoil, U.S. House Speaker Nancy Pelosi (D-Calif.) said any potential U.S./U.K. trade deal would not pass Congress if Britain undermines the Good Friday peace agreement.
• Euro is up 10% against the dollar since March and policymakers are scrambling to ease the burden on European exporters. Questions on the topic are expected for Christine Lagarde, the ECB’s president, at a news conference following its policy-setting meeting in Frankfurt today. Normally, a central bank would cut interest rates to deal with this kind of situation, but rates are already deeply negative across the eurozone. Some observers note the ECB may stress that the €1.35 trillion PEPP (pandemic emergency purchase program) is not a ceiling, and that it is prepared to increase its pace and size. The ECB today left lending rates unchanged and made no changes in the bond buying program.
• Kansas City Southern railroad operator has rejected a roughly $20 billion takeover offer from a group of investors, arguing that the bid ($208 a share) undervalues it, according to people familiar with the matter cited by the Wall Street Journal. Global Infrastructure Partners and the infrastructure arm of private-equity giant Blackstone Group made the offer after Kansas City Southern brushed aside an earlier offer of less than $200 a share. The most recent offer represented a roughly 35% premium to Kansas City Southern’s share price before the prospective buyers came in. The offers have come at an apparent low point in freight rail operations. Industrywide volumes for the Class 1 railroads fell 11.8% in the first eight months of this year, according to the Association of American Railroads, although shipments in some sectors have picked up more recently.
• Climate change poses major risk to financial stability, report finds. A study commissioned by commodity futures regulator CFTC calls for better pricing of carbon emissions. Link to WSJ article. The report calls for better pricing of carbon emissions in the U.S. as well as a variety of steps by financial regulators to incorporate climate-related risks into their rules for banks, asset managers and other firms. “As we’ve seen in the past few weeks alone, extreme weather events continue to sweep the nation from the severe wildfires of the West to the devastating Midwest derecho and damaging Gulf Coast hurricanes,” said Rostin Behnam, a Democratic CFTC commissioner who sponsors the advisory panel responsible for the report. “This trend — which is increasingly becoming our new normal — will likely continue to worsen in frequency and intensity as a result of a changing climate.”
— Bloomberg joins Reuters in reporting President Trump plans to reject biofuel waivers. Trump administration officials have told ethanol advocates the government will reject requests by refineries to be waived from renewable fuel-usage requirements — a bid to reinforce the president’s support in the key swing states of Iowa, Wisconsin and Minnesota. The Environmental Protection Agency could reject as many as 67 of those retroactive waiver requests as soon as this week, Bloomberg reported, citing four people familiar with the matter who asked not to be named prior to an announcement.
— Senate will likely hold procedural vote today on whether to advance the slimmed-down Republican pandemic relief bill, with Democrats saying they have the votes to stop it reaching the 60-member support it needs.
Senate Majority Leader Mitch McConnell (R-Ky.) acknowledged Wednesday that it is little more than a show vote. “It will be a procedural vote. It’s not a vote to pass our bill tomorrow precisely as written,” he said.
The vote to end debate on the legislative vehicle (S 178) requires 60 votes and is expected to fall short. Republican leaders are hoping to swing a simple majority, with Sen. John Thune (R-S.D.) noting a majority vote would demonstrate party unity and that “puts pressure on Democrats to come to the table and to make a deal.” Aside from a potential “aye” vote from Sen. Doug Jones (D-Ala.), the bill isn’t expected to pull much Democratic support.
Pressure on Trump to get a larger funded measure? Senate Minority Leader Chuck Schumer (D-N.Y.) said public pressure on the White House may force President Donald Trump to make the concessions needed to get a larger deal done in the coming weeks.
— USDA sets Seafood Trade Relief Program (STRP) details with signup to start Sept. 14. USDA will launch signup for the Seafood Trade Relief Program (STRP) Sept. 14 to make up to $530 million in payments to eligible commercial fishermen that have been “impacted by trade actions of foreign governments resulting in the loss of exports.”
Payments under the program are aimed at “expanding or aiding in the expansion of domestic markets for U.S. caught and sold seafood.” Payments under the program are to be made using authority under the Commodity Credit Corporation (CCC) and apply to seafood production reported as harvested in calendar 2019.
USDA said that trade damages of more than $5 million were required for the type of seafood to be eligible for an STRP payment. There is a $250,000 payment limit per person or legal entity. Only those commercial fishing operations in business at the time of application are eligible. USDA used the same methodology to determine damages under STRP as they did for the Market Facilitation Program (MFP) and Food Purchase and Distribution Program (FPDP). The Notice of Funding Availability (NOFA) for STRP is scheduled to be published in the Federal Register on Sept. 14.
— Update on China:
- China debates cutting U.S. access to drugs. “In recent weeks, as the United States has ramped up its attacks on Chinese tech firms and the threat of financial decoupling has grown, government advisers in Beijing have begun debating a so-called nuclear option: cutting U.S. access to medicines. From pills for pain relief to HIV medications, the US is heavily reliant on imported medicines from China thanks to large-scale offshoring in the 1990s.” Link to article in South China Morning Post.
- A Phase 1 trade deal collapse is the most likely China-related event to upend the U.S. election, says an article in Politico's China Watcher. It says Harvard Law School’s Mark Wu says President Donald Trump could declare China “off track in meeting the purchase commitments.” Eurasia Group’s Paul Triolo says Trump “has become progressively less interested in the trade deal,” while E14 Fund’s Calvin Chin says ditching the deal is the “easiest to pull off [with] good electoral bang for the buck.”
The deal would be (bureaucratically) easy to unwind, according to Asia Society’s Wendy Cutler. “Legally, the agreement requires a 60-day advance notification period before withdrawal,” she told China Watcher, “but as we’ve seen to date the legalities would be overshadowed by a surprise announcement.” The article speculates that “Trump can get the electoral pop from an announcement his administration intends to leave, even if it’s not official until after the election.”
- Chinese wheat farmers are hoarding more of their harvests on expectations of rising prices in light of severe summer floods and fallout from the coronavirus, according to the Nikkei Asian Review. Link.
- House panel to air Xinjiang force labor concerns. The House Ways and Means Committee will hold a hearing next week on concerns about the use of forced labor in products made in Xinjiang.
- U.S./China Phase 1 tracker: China’s purchases of U.S. goods. Link.
— Food and beverage industry update:
- Walmart takes another page from the Amazon playbook. Partnering with end-to-end delivery firm Flytrex, Walmart launched a pilot program this week to test using drones to deliver groceries and household essentials in Fayetteville, North Carolina. Even though it is expected to be a long time before drones are widely used for deliveries, the company hopes to gain insight by using the technology. Besides mirroring Amazon's Prime Air program, Walmart also announced its Walmart+ membership program last week that will take on Amazon Prime.
- 10 food trends for the next decade: Family dinners, less booze and more. Best bets on how we’ll eat, drink, farm and find comfort at the table in the years to come. Link to WSJ article.
— Update on reopening America... and around the world:
- National Football League (NFL) kicks off its 101st season tonight. The NFL commissioner and the league’s chief medical officer write that they are “cautiously optimistic” as they prepare to implement new high-tech measures designed to reduce Covid-19 infections. “The league’s eagerness to return in full force has been modulated by our primary concern: the health and safety of players, coaches, staff and the public,” they write. But they also add that there will be “speed bumps and perhaps detours along the way.”
- New York City will allow indoor dining at restaurants at a limited capacity starting Sept. 30, New York Gov. Andrew Cuomo said Wednesday, lifting a six-month ban aimed at stemming the spread of the new coronavirus. While restaurants have been able to offer takeout and serve customers outdoors, the industry has struggled to make ends meet without the ability to offer indoor seating. New York had been one of the few cities with a total ban on indoor dining.
— Coronavirus update:
- Summary: Source: Johns Hopkins University as of 7:00 a.m. ET.
— 27,891,274: Confirmed cases world-wide, and 904,192 deaths
— 34,256: New U.S. cases recorded yesterday
— 6,363,276: Total confirmed cases in the U.S.
— 1,206: Deaths in the U.S. recorded yesterday
— 190,873: Total U.S. deaths
— 84,558,560: Tests conducted in the U.S.
Link to Covid Case Tracker
Link to Our World in Data
- New U.S. coronavirus infections fell by almost 13% over the past week. The U.S. is now averaging about 37,000 new cases every day. While still large, the U.S. has been recording steady progress since August.
- 513,415 children and teens in the U.S. have tested positive for the coronavirus from the time the pandemic arrived in the country through Sept. 3, according to a report from the American Academy of Pediatrics and Children's Hospital Association.
- AstraZeneca could restart its clinical trials as soon as next week depending on an investigation into the volunteer’s illness, the Financial Times reported. In other vaccine developments, Pfizer and BioNTech agreed to sell 200 million doses of their treatment to the EU, with an option for an additional 100 million.
- How many planes are needed to deliver a coronavirus vaccine? Dubbing it the "largest single transport challenge ever," the International Air Transport Association (IATA) called on governments to start "careful planning with industry stakeholders" for the large-scale delivery of a coronavirus vaccine. "Just providing a single dose to 7.8 billion people would fill 8,000 (Boeing) 747 cargo aircraft," according to the air transport body. The IATA also cautioned that "while there are still many unknowns (number of doses, temperature sensitivities, manufacturing locations, etc.), it is clear that the scale of activity will be vast, that cold chain facilities will be required and that delivery to every corner of the planet will be needed."
- U.K. will place new limits on social gatherings to stem the spread of coronavirus. Gatherings of more than six people will be banned in England starting Monday, after the number of new coronavirus infections there rose earlier this month to about 2,000 a day, from less than half that number a month ago. European officials worry that without firm action now, the infection could once again percolate by winter to high-risk groups.
- Trump admits to concealing the true threat of coronavirus in new Woodward book, Rage. President Donald Trump was directly quoted (and recorded) telling a reporter on February 7 that the coronavirus was “deadly stuff” and much worse than the flu, and that he deliberately understated its danger during the initial outbreak of the pandemic. He made the statements to Bob Woodward, an architect of the original Watergate investigation. Trump's admissions are in stark contrast to his frequent public comments at the time insisting that the virus was "going to disappear" and "all work out fine."
"I wanted to always play it down," Trump told Woodward on March 19, even as he had declared a national emergency over the virus days earlier. "I still like playing it down, because I don't want to create a panic."
Joe Biden responded Wednesday to the Woodward reporting, accusing Trump of a "life-and-death betrayal of the American people.
The Washington Post released the first excerpts from the 480-page book on Wednesday, as well as audio recordings from Woodward’s 18 interviews with Trump.
The Post notes that Woodward also reports in his book about unflattering comments made privately about the president by top officials. “The president has no moral compass,” former Defense Secretary James Mattis allegedly said, calling Trump “dangerous” and “unfit.” Former Director of National Intelligence Dan Coats believed “that Putin had something on Trump.” Dr. Anthony Fauci, the nation’s top infectious disease expert, is quoted as calling Trump’s leadership “rudderless” and claiming that “his sole purpose is to get re-elected.”
Trump even boasted to Woodward about a secret new weapons system. “I have built a nuclear — a weapons system that nobody’s ever had in this country before,” the president said. “We have stuff that you haven’t even seen or heard about.” According to Woodward, other sources confirmed the existence of a new weapons system, although they would not provide details except to say that they were surprised Trump had disclosed it.
- Only 14% of Americans think a coronavirus vaccine will be widely available before the Nov. 3 elections, and even if it is, most Americans say they won't take it, according to a new poll by the Kaiser Family Foundation. Some 62% of adults say they're worried the Food and Drug Administration will rush to approve a vaccine under pressure from the Trump administration. The responses vary by partisan affiliation; 86% of Democrats and 61% of independents say they're worried, while only 35% of Republicans say the same. Republicans were least likely to say they'd get a vaccine before the election, even if it was free and FDA-approved.
POLITICS & ELECTIONS
— 2020 Presidential Election Interactive Map
— The Green Papers
— Real Clear Politics
— Presidential debates: Scheduled to occur Sept. 29, Oct. 15 and Oct. 22.
— VP debate: Scheduled for Oct. 7.
— Days until election
- Joe Biden proposed a 10% tax to penalize American companies that move manufacturing and service jobs abroad and a 10% tax credit for businesses to create jobs in the U.S. Link to WaPo article for details. The new tax proposals from the Democratic presidential candidate would broaden the U.S. tax code’s global reach, reversing many of the changes in the 2017 tax law signed by President Trump.
- Financial Times recently wrote about the possibility of USTR Bob Lighthizer staying in office for a few months if former Vice President Joe Biden is elected. Link (paywall).
- Top green group aims record $100 million at defeating Trump and Republicans. A super PAC affiliated with the League of Conservation Voters and related groups is aiming to spend more than $100 million to elect Joe Biden and other Democrats in November, breaking the Washington-based organization’s previous record of $85 million in 2018. Link to WaPo article.
OTHER ITEMS OF NOTE
- As expected, some Democratic-led states sue on Trump’s Arctic refuge drilling plan. A group of 15 Democratic state attorneys general sued to block the Trump administration’s decision to sell drilling rights in the Arctic National Wildlife Refuge, alleging the plan fails to account for the danger to wildlife and climate-change impacts. The plan to open drilling in the 1.56 million-acre coastal plain ignores impacts on polar bears, caribou and the region’s other wildlife, Washington Attorney General Bob Ferguson said in a complaint filed in Alaska federal court yesterday.
- Durbin introduces conservation corps bill. Sen. Dick Durbin (D-Ill.) introduced S 4538, which would establish a conservation corps in the Departments of the Interior and Agriculture in an effort to boost employment and job training while restoring parks and trails.
- USTR seeking public input on trade barriers to U.S. exports of goods and services. The Office of the US Trade Representative (USTR) is seeking comments on “significant barriers to U.S. exports of goods and services, U.S. foreign direct investment, and the protection and enforcement of intellectual property rights” for compiling the 2021 National Trade Estimate Report on Foreign Trade Barriers. USTR said it would also consider information submitted as part of the annual review of all U.S. trade agreements on telecommunications products and services. Information sought includes issues relative to import policies, technical barriers to trade, sanitary and phytosanitary measures, subsidies, government procurement restrictions, intellectual property protection, services barriers and more. USTR wants commenters to include an estimate of the potential increase in U.S. exports if the barriers were removed. The request is published in today’s (Sept. 10) Federal Register. More information is available via this link.