Archives of “April 2021” month

rss

White House: Chip shortage is a national security issue

  
  Analysis

White House on chip shortage

The chip shortage is leading to supply chain issues in the auto industry and in other industries in the chip dominant world.
The White House press secretary Psaki is speaking to the issue ahead of a meeting on chips today. Says:
  • semiconductor chip shortage is a national security issue
  • White House wants to work closely with industry to prevent chip shortage from happening again
  • Biden wants to hear directly from companies on the chip shortage
  • does not expect decision for any announcement to come from meeting today.
Intel recently announced a $20 billion infrastructure plan to build a chip foundry.
Nvidia announced this morning that they are looking to make CPUs in direct competition to Intel. Nvidia shares have moved higher on the news (up about 1%). Intel shares have slumped 3.25% on the day.

Covid variants + long wait for vaccines = trouble in emerging markets

  
Analysis, COVID-19

Look at this chart from India

Look at this chart from India
From the outset of the pandemic, one of the great fears is that covid would take hold in a crowded, impoverished place like India.
The country has done a remarkable job of containing it so far but that appears to have changed with the new variants. That is a terrifying chart showing more than 150,000 new daily cases.
There are troubling trends in Southeast Asia as well, with cases spiking in the Philippines.
The question for markets is: Do they care?
We’ve seen time and time again that the market is able to look through covid and towards vaccines and a re-opening. That’s a tough paradigm to bet against. Adding to it is more proof in Q1 that economies are getting better at adapting to the virus.
But geez is that ever a scary chart.

Fed’s Powell says does not want to return to bad old days of inflation

  
Analysis, Economy

Further headlines are crossing from Federal Reserve Chair Powell interview on US TV show 60 Minutes

 

Further now, Headlines via Reuters:

 

  • reopening too quickly a ‘principal risk’ to recovery
  • Fed will support economy until recovery is complete
  • in assessing progress wants to see labor force participation moving back up
  • Fed does not want inflation to go materially above 2% and return to the ‘bad, old inflation days’
  • does want inflation ‘moderately’ above 2% for some time
  • does not appear the case now that large federal deficits cause inflation
  • some parts of the country more than fully recovered, but real disparities exist
  • lower wage workers who lost jobs should be able to return to them ‘much faster now’
  • for many people, the covid recession is over but for millions of others it is not and ‘we’re going to keep those people in mind’
  • economic recovery has been ‘better, consistently better than I’d expected’, helped by support from congress and the Fed
  • with vaccinations ‘you’re seeing the resumption of what appears to be a very strong expansion’

 

 

  • asked if he feared the US a year ago was looking at a great depression scenario, says ‘I never really thought that was a likely outcome’
  • would have been ‘shocked’ if told this time last year that more than 550,000 Americans would die of covid
  • some asset prices are elevated by some historical metrics
  • fed can’t predict asset bubbles, more focused on resiliency of system if shocks occur
  • believes financial system has wherewithal to stand significant shock to markets
  • ‘very low’ chance of a repeat of the 2008 financial crisis
  • ‘most parts of the financial system made it through quite a stress test’ in last year’s economy collapse
  • monitoring situation with Archegos ‘very carefully,’ does not seem to raise issues around stability of the financial system or the institutions involved
  • is concerning that a single client could cause such large losses, suggest ‘significant shortfall’ in understanding of risks
  • fed working hard studying digital currency, but no decision yet
  • possible digital currency could be a benefit, but involves ‘subtle, complex’ set of questions

 

Israeli study finds South African COVID-19 mutant may beat the Pfizer vaccine

  
Analysis, COVID-19

Finding from a yet to be peer-reviewed Israeli study, released on Saturday

In summary:
  • study compared almost 400 people who had tested positive for COVID-19, 14 days or more after they received one or two doses of the vaccine, against the same number of unvaccinated patients with the disease.
  • It matched age and gender, among other characteristics.
  • South African variant, B.1.351, made up about 1% of all the COVID-19 cases across all the people studied
  • among patients who had received two doses of the vaccine, the variant’s prevalence rate was eight times higher than those unvaccinated: 5.4% versus 0.7%
Go to top