US ECONOMY & POLITICS

FDA Panel Weighs Covid-19 Booster Shots as Health Officials Debate Need – Wall Street Journal, 9/17/2021

• The outside panel of about 20 scientific advisers was meeting Friday to review information Friday about the Pfizer and BioNTech vaccine’s declining protection against Covid-19 over time and on how people tolerated additional dose.
• The committee will vote in the afternoon on whether the safety and effectiveness data from Pfizer’s clinical trial supports FDA approval of a booster dose administered at least six months after the second dose for people 16 years and older.
• One possible outcome of the meeting could be for the panel to recommend booster shots only for certain high-risk groups, such as healthcare workers or people 65 and older.
• If the Vaccines and Related Biological Products Advisory Committee recommends authorizing boosters, the FDA could move within days to approve distributing them.
• Pfizer’s application includes data from more than 300 subjects in its clinical trial who received a third dose and showed significant increases in neutralizing antibodies, which are important in the immune response against Covid-19.
• In 11 subjects between ages 18 and 55 who received a booster, neutralizing antibodies were five-fold higher one month later, compared with one month after their second shot, the data showed. In 12 older subjects, the increase was 12-fold.

Fed Seen Announcing Bond Taper in November, Rate Liftoff in 2023 – Bloomberg, 9/17/2021

• The Federal Reserve will probably hint at its meeting next week that it is moving toward scaling back monthly asset purchases and make a formal announcement in November.
• The Federal Open Market Committee meets for two days starting Tuesday and will issue a policy statement at 2 p.m. Washington time Wednesday.
• Two-thirds of economists surveyed expect the bond-buying announcement at the Fed’s Nov. 2-3 meeting, with more than half seeing the tapering starting in December.
• The policy group is expected to hold rates near zero and continue monthly purchase of $80 billion in Treasuries and $40 billion in mortgage securities.
• Some Fed officials say they want to finish tapering before raising rates and their median forecast in June showed them on hold through next year, though seven of 18 officials did favor a rate hike in 2022.
• The FOMC may project 3.9% inflation for 2021, with 2.2% the following two years, and the unemployment rate falling to its pre-Covid low of 3.5% by 2023, according to the economists.

Americans See Worst Buying Conditions in Decades on High Prices – Bloomberg, 9/17/2021

• U.S. consumer sentiment rose slightly in early September but remained close to a near-decade low, while buying conditions deteriorated to their worst since 1980 because of high prices.
• The University of Michigan’s preliminary sentiment index edged up to 71 from 70.3 in August, data released Friday showed.
• The figure trailed the median estimate of 72 in a Bloomberg survey of economists.
• Buying conditions for household durables, homes and motor vehicles all fell to the lowest in decades.
• Consumers expect inflation to rise 4.7% over the coming year, matching the highest since 2008.
• The university’s gauge of current conditions fell to 77.1, the lowest since April 2020, from 78.5.
• A measure of expectations rose to 67.1 from 65.1, according to the survey conducted Aug. 25 to Sept. 12.

Biden Warns States, Cities of Fallout From Debt Default – Bloomberg, 9/17/2021

• President Joe Biden’s administration is warning state and local governments that the risk of a default on U.S. debt could trigger a recession and curb the flow of federal aid, as it urges Congress to raise or suspend the federal borrowing ceiling and avoid a crisis.
• The White House said disaster relief payments, Medicaid and the children’s health insurance program, as well as funding for education, infrastructure and child nutrition could be disrupted.
• The debt limit snapped back into place at the beginning of August, but Treasury has been using so-called extraordinary measures since then to avoid a default.
• The administration has been urging Congress to simply raise or suspend the limit, as has been done regularly in the past, though Republicans have seized on the issue as a way to combat Biden’s domestic fiscal agenda, which includes tax increases for corporations and a series of proposed spending measures that the GOP opposes.

Used Car Prices in U.S. Rise Again in First Half of September – Bloomberg, 9/17/2021

• Used car prices in the U.S. rose again in early September after slipping over the summer.
• The Manheim U.S. Used Vehicle Value Index, a measure of pricing trends, increased 3.6% in the first half of September compared with a month earlier.
• That’s the first month-over-month increase since May. The index jumped 24.9% from the same period a year ago.
• The surge in used car prices this year amid supply chain disruptions and a rebounding economy has been a major contributor to the jump in U.S. inflation.
• Carmakers have said production of new vehicles this fall will continue to be constrained by the chip shortage and the spread of Covid-19 in Southeast Asia.
• General Motors said Thursday it is cutting production at six North American assembly plants due to supply shortage.

EUROPE & WORLD

Covid-19 Lockdowns in Asia Deepen Commodity Supply-Chain Pain – Wall Street Journal, 9/17/2021

• The recent surge in Covid-19 cases in Southeast Asia has throttled ports and locked down plantations and processors, sparking extended disruptions of raw materials such as palm oil, coffee and tin.
• Restrictions in Malaysia, the world’s second-largest producer of palm oil, have prevented migrant laborers from traveling to plantations, raising prices of the ubiquitous edible oil used to make candy bars, shampoo and biofuel.
• Lockdowns in Vietnam, the world’s No. 2 coffee exporter by volume, have delayed the processing and export of coffee beans, adding to production concerns caused by poor weather in Brazil.
• Vietnam’s coffee exports from January through Aug. 15 fell 8.2% from the same period last year.
• Malaysia’s tin exports decreased 29% in June from a year earlier.

All Eyes on Turnout as Canada’s Tight Election Campaign Enters Final Days – Reuters, 9/17/2021

• As Canada’s election race enters its final weekend, Prime Minister Justin Trudeau is redoubling efforts to motivate supporters, knowing his bid for re-election on Monday could be doomed by low turnout.
• Recent opinion polls show Trudeau’s Liberals neck and neck with the opposition Conservatives led by Erin O’Toole, suggesting that getting out the vote will be crucial.
• Low turnout tends to favor the Conservatives, who are traditionally better at ensuring their supporters cast ballots.
• While Canadians voted in early polls in record numbers, demand for mail-in ballots has been far lower than expected.

Hong Kong Considers Allowing SPAC Listings – Wall Street Journal, 9/17/2021

• Hong Kong is considering whether to allow listings of blank-check companies, potentially opening the doors to a wave of Chinese-focused deals involving special-purpose acquisition companies.
• Proposals released Friday by Hong Kong’s stock exchange would require SPACs to raise at least 1 billion Hong Kong dollars, the equivalent of $128.5 million, in an IPO.
• The companies would have two years to find a merger partner, and would have to conclude the merger within three years.
• Subscription and trading of SPAC securities will be restricted to professional investors, while individual investors will be allowed to buy into stocks after the merger takes place.
• Before merging with SPACs, companies would need to raise 15% to 25% of their expected market capitalization via a so-called PIPE, or private investment in public equity.

Universal’s New Beijing Theme Park Will Ride on U.S.-China Ties – Wall Street Journal, 9/17/2021

• Universal Beijing Resort, a multibillion-dollar bet on Chinese consumers’ demand for Hollywood experiences, is Universal Parks & Resorts’ fifth theme park globally.
• Opening day for the project, which includes the Universal Studios Beijing theme park and two hotels, comes 20 years after the U.S. company first signed its joint-venture agreement with Beijing, according to Chinese state media.
• The new theme park on the outskirts of the Chinese capital offers a growth opportunity for NBCUniversal, a unit of Comcast.
• The park’s attractions include immersive rides such as Harry Potter and the Forbidden Journey, Despicable Me Minion Mayhem and a Transformers-themed roller coaster called Decepticoaster.
• Chinese state-owned companies own 70% of the project, while NBCUniversal holds the remaining 30% of the park.
• China and NBCUniversal are also connected by next year’s Winter Olympics in Beijing.

Energy Price Crunch Pushes Investors in Europe to Bet on Inflation – Wall Street Journal, 9/17/2021

• Record-breaking energy prices are driving bond investors to bet on a jump in eurozone inflation in the coming months, turning the trade bloc’s narrative of superlow price growth on its head, at least temporarily.
• A key market-based measure of investors’ inflation expectations, a traded instrument known as a forward inflation swap, showed price rises peaking at an annual rate of 4.1% in November, nearly double the level in July and the most since 2008.
• Natural-gas prices hit records in Europe in recent days from a combination of greater demand from the pandemic recovery and lower stores of fuel in tanks.
• Electricity prices more than doubled in the U.K. in September at their peak and also soared in Germany, France and the Netherlands.
• A doubling of energy prices in Europe plus the U.K. would cost consumers an extra 128 billion euros a year, equivalent to $150.6 billion, according to research by SEB.
• Expectations for longer-term inflation in Europe, as seen in the 10-year German bund break-even rate, have been on the rise but peaked at 1.76% this week. This is still below the ECB’s target rate of 2%.

Factmonster – TODAY in HISTORY

• The Constitution was completed and signed by a majority of the delegates attending the constitutional convention in Philadelphia. (1787)
• The bloodiest day in U.S. military history occurred at the Battle of Antietam when more than 23,000 were killed or wounded. (1862)
• Lt. Thomas Selfridge, a passenger in a plane piloted by Orville Wright, became the first airplane fatality when the craft crashed. (1908)
• Heather Whitestone of Alabama became the first deaf Miss America. (1994)