US ECONOMY & POLITICS

U.S. core capital goods orders, shipments rise strongly in August – Reuters, 9/27/2021

• New orders and shipments of key U.S.-made capital goods increased solidly in August amid strong demand for computers and electronic products, keeping business spending on equipment on track for another quarter of robust growth.
• Demand for goods is being driven by businesses desperate to replenish inventories, depleted in the first half the year.
• Orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, rose 0.5% last month, the Commerce Department said on Monday.
• Data for July was revised higher to show these so-called core capital goods orders gaining 0.3% instead of the previously reported 0.1%.
• Shipments of core capital goods advanced 0.7% last month after increasing 0.9% in July.
• Orders for computers and electronic products rose 1.4% last month.
• Raw materials shortages and a resurgence in COVID-19 cases, driven by the highly contagious Delta variant of the coronavirus prompted economists to slash their estimates for third-quarter GDP to as low as 3.5% annualized rate from as high as a 9% pace.
• The economy grew at a 6.6% pace in the second quarter.
• Orders for civilian aircraft soared 77.9%. Boeing reported on its website that it had received 53 aircraft orders last month compared to 31 in July.

Boston Fed Leader Rosengren Announces Early Retirement Amid Trading Controversy – Wall Street Journal, 9/27/2021

• Mr. Rosengren, 64 years old, said in a statement released by the Boston Fed that he was leaving as he had qualified for a kidney transplant to deal with a long-running condition.
• In most cases, regional Fed leaders must retire at 65, and Mr. Rosengren was due to leave the bank next June.
• His retirement follows the recent disclosure that Mr. Rosengren traded stocks and other investments while also helping to set monetary policy.
• Recently disclosed information from the Boston Fed showed that Mr. Rosengren, who would have held a voting role on the rate-setting Federal Open Market Committee next year, had traded stocks and other investments related to the real-estate industry last year.

Congress Heads Into Tumultuous Week Pressured by Converging Deadlines – Wall Street Journal, 9/26/2021

• A slew of high-stakes deadlines will collide on Capitol Hill this week, setting up potentially chaotic negotiations against the backdrop of expiring government funding and the threat of a possible U.S. default.
• Democratic leaders are trying to shepherd two complicated legislative packages: a roughly $1 trillion bipartisan infrastructure bill and a sprawling healthcare, education and climate package whose proposed $3.5 trillion price tag and contents are still under intense debate within the party.
• At the same time, the government’s funding is set to expire at 12:01 a.m. on Friday, Oct. 1, which would partially shut down the government if Congress doesn’t act.
• The Senate is expected to vote Monday evening on a measure extending the government’s funding through Dec. 3, 2021, and suspending the debt limit into December 2022, but it is expected to be blocked by Republicans, leaving the matter unresolved.
• Democrats do have the ability to raise the debt ceiling on their own, by revising their current budget resolution either to increase the debt limit as a stand-alone bill or fold it into the $3.5 trillion budget package they are currently writing.

EUROPE & WORLD

Pledging stability, German SPD seeks three-way alliance to succeed Merkel – Reuters, 9/27/2021

• German Social Democrat Olaf Scholz vowed on Monday to strengthen the European Union and keep up the transatlantic partnership in a three-way coalition government he hopes to form by Christmas to take over from Angela Merkel’s conservatives.
• Scholz’s Social Democrats (SPD) came first in Sunday’s national election, just ahead of the conservatives, and aim to lead a government for the first time since 2005 in a coalition with the Greens and the liberal Free Democrats (FDP).
• The SPD, Germany’s oldest party, won 25.7% of the vote, up five percentage points from the 2017 federal election, ahead of Merkel’s CDU/CSU conservative bloc on 24.1%, provisional results showed.
• The Greens came in with 14.8% and the FDP won 11.5%.
• Merkel, who did not seek a fifth term as chancellor, will stay on in a caretaker role during the coalition negotiations that will set the future course of Europe’s largest economy.

Panic Buying in U.K. Creates Shortages at Gas Stations – Wall Street Journal, 9/27/2021

• The Covid-19 pandemic and the U.K.’s departure from the European Union have resulted in a shortage of tanker drivers to ferry fuel across the country.
• Panic buying started last week after media reports that a handful of gas stations had to close due to dwindling supplies.
• To ease pressure on hauliers, the government is temporarily relaxing visa restrictions to allow in 5,000 truck drivers from across the EU.
• It has also drafted in the military to help clear a backlog of people waiting to take truck driving tests.
• The Petrol Retailers Association, which represents independent fuel retailers, said Sunday almost two-thirds of its members were out of fuel
• According to the association, there are 8,300 gas stations in the U.K. Existing supplies are being given priority to highway gas stations to avoid tailbacks.

Evergrande Worries Help Fuel Selloff at Chinese Developer Sunac – Wall Street Journal, 9/27/2021

• Investors sold down securities from Sunac over two trading sessions, after a document circulated online showing a Sunac unit asking for government help to ease its liquidity difficulties.
• Sunac’s Hong Kong-listed shares fell 9.4% Monday to close at their lowest in more than four years, building on a near-7% decline in the previous trading session.
• Its U.S.-dollar-denominated bonds also retreated, with 7% bonds due in July 2025 quoted at about 81 cents on the dollar by late afternoon Monday in Hong Kong, according to Tradeweb.
• This debt was quoted above 98 cents on the dollar at the start of the month, and as recently as July Sunac was able to raise $500 million of new debt funding from bond investors.
• Late Monday in Hong Kong, Sunac said it had bought back and would cancel some bonds due in 2024 with a face value of $33.6 million.

Top Netflix Hit ‘Squid Game’ Sparks Korean Media Stock Surge – Bloomberg, 9/26/2021

• A dramatized survival game in the vein of “Hunger Games,” the show currently tops the global rankings on Netflix, and is the first Korean drama to claim the No. 1 spot in the U.S. on the service, according to data from streaming ratings firm FlixPatrol.
• Bucket Studio, which holds a stake in the agency representing Squid Game’s lead actor Lee Jung-Jae, has surged more than 70% in the past three trading sessions.
• Showbox whose predecessor had invested in Siren Pictures, the show’s privately owned production company — jumped more than 50% last week before slipping Monday.
• Netflix on Saturday held its first-ever Global Fan Event with a sneak peek of its upcoming films and TV shows.

Factmonster – TODAY in HISTORY

• Warsaw, Poland, was surrendered to the Nazis after weeks of resistance. (1939)
• Typhoon Vera battered the Japanese island of Honshu, killing almost 5,000 people. (1959)
• The Warren Commission report concluded that there was no conspiracy in the assassination of President John F. Kennedy; Lee Harvey Oswald acted alone. (1964)