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New this a.m.: White House on supply chains — The White House early this morning rolled out the results of its review of problems in American supply chains that appear to be holding back growth and possibly boosting inflation.
Among the actions the White House announced: HHS, “under the Defense Production Act … and building on current public-private partnerships, will establish a public-private consortium for advanced manufacturing and onshoring of domestic essential medicines production.
“The consortium’s first task will be to select 50-100 critical drugs, drawn from the Food and Drug Administration’s essential medicines list, to be the focus of an enhanced onshoring effort. …
“The Department of Energy (DOE) will release a National Blueprint for Lithium Batteries. This Blueprint will codify the findings of the battery supply chain review in a 10-year, whole-of-government plan to urgently develop a domestic lithium battery supply chain …
“[T]he Administration will strengthen engagement with allies and partners to promote fair semiconductor chip allocations, increase production, and promote increased investment.”
First look: Looking at the wage gap for Black women — Per new research out this morning from Beth Ann Bovino, U.S. Chief Economist at S&P Global Ratings: “If educational attainment among Black women had kept pace with that of white women from 1960-2019, the U.S. would have generated an additional $107 billion in economic activity.
“Moreover, if Black women had also been in positions that better matched their education and skill sets, the productivity boost would have added another $507 billion to the world’s biggest economy. ….
“If the educational and professional gaps between Black and white women had been closed, a Black college-educated female professional would have made $5,000 more in annual wages in 2019. A still-large ($7,600) gap exists even controlling for education.”
Wall Street sticks behind McGuire for NYC Mayor — Via Bloomberg’s Bill Allison: “Financial industry donors are continuing to pump money into former Citigroup executive Raymond McGuire’s long-shot bid to be New York City mayor despite his lackluster popularity among voters.
“Wall Street has showered McGuire with more than five times as much money as it’s given to any of his competitors, helping him top the field in fundraising as he founders at the bottom of polls for the decisive June 22 Democratic primary. The winner is almost certain to become the next mayor in the overwhelmingly Democratic city.”
NFIB small business survey at 6:00 a.m. expected to rise to 100.7 from 99.8 … JOLTS report at 10:00 a.m. expected to show yet another record high for job openings at 10:00 perhaps as high as 8.8 million, up from 8.1 in March … Senate Budget Committee has a hearing at 11:00 a.m. on President Biden’s budget with Acting Office of Management and Budget Director Shalanda D. Young
“AMERICA IS BACK” — Reuters/Brussels: “Biden’s trip to Europe this week will signal that multilateralism has survived the Trump years, and set the stage for transatlantic cooperation on challenges from China and Russia to climate change, the chairman of EU summits said.
“‘America is back,’ European Council President Charles Michel said, using the motto Biden has adopted after former President Donald Trump pulled Washington out of several multilateral institutions and at one point threatened to walk out of NATO.
CANADA TO EASE TRAVEL RESTRICTIONS — Our Andy Blatchford: “The mayors of Canadian border cities say Prime Minister Justin Trudeau’s government has signaled it could start easing Covid-19 restrictions at the Canada-U.S. frontier on June 22 if the country’s vaccination campaign stays on its current trajectory.
“Jim Diodati, mayor of Niagara Falls, Ontario, told POLITICO that Public Safety Minister Bill Blair delivered the message during a recent virtual meeting of border mayors from the province. ‘He didn’t put it in stone but he suggested that [June 22] is the date they’re looking at,’ Diodati said .. Canada-U.S. land crossings were shuttered March 2020 to nonessential travel in an effort to slow Covid-19’s spread.”
WHITE HOUSE EXPERT IS BITCOIN MILLIONAIRE — Our Daniel Lippman: “Tim Wu, a top antitrust expert at the White House, is a Bitcoin millionaire, according to a personal financial disclosure he recently filed.
“Wu, a tough critic of tech companies’ power, owns between $1 million and $5 million in Bitcoin, as well as between $100,001 and $250,000 in Filecoin, which is a storage platform for cryptocurrency, according to the disclosure. His investment in Bitcoin is his largest holding in his financial portfolio.”
MANCHIN ENRAGES THE LEFT — Our Burgess Everett and Marianne LeVine:
“Joe Manchin is sparking outright fury from liberals — with some Black Democrats invoking Jim Crow and Mitch McConnell as they blast the West Virginian’s resistance to a sweeping elections bill. Manchin’s fellow Senate Democrats are being far more conciliatory.
“After all, the 50-vote Senate majority needs Manchin’s vote to do just about anything. So not even its most progressive members seem to want to poke the bear. Yet angst is quietly rising inside the Democratic caucus over Manchin’s approach.
“He opposes changing the rules for filibustering legislation, challenges the urgency of pursuing a party-line infrastructure spending bill and plans to vote against his party’s high-profile elections bill. And amid Manchin’s reluctance, it’s not clear at the moment how Democrats will break through on the priorities they campaigned on for years.”
STOCKS CLAW BACK MUCH OF AN EARLY LOSS — AP’s Damian J. Troise and Alex Veiga: “Stocks clawed back much of their early losses and ended mixed on Wall Street Monday. The S&P 500 slipped less than 0.1 percent and the Nasdaq rose 0.5 percent.
“The subdued opening to the week follows several choppy weeks as investors continue to gauge the economy’s recovery and the risks of rising inflation. On Thursday investors will get more information on how much consumer prices rose last month. Technology stocks, banks and industrial companies pulled the broader market lower. Health care companies made solid gains, as did cruise line operators.”
COMMODITY PRICE SURGES ADD TO INFLATION FEARS — WSJ’s Tom Fairless, Alistair MacDonald and Jesse Newman: “The run-up in commodity prices is casting a cloud over the global economic recovery, slamming vulnerable businesses and households and adding to fears that inflation could become more persistent.
“The world hasn’t seen such across-the-board commodity-price increases since the beginning of the global financial crisis, and before that, the 1970s. Lumber, iron ore and copper have hit records. Corn, soybeans and wheat have jumped to their highest levels in eight years. Oil recently reached a two-year high.”
SEC TO CONSIDER NEW RESTRICTIONS ON COMPANY INSIDERS’ TRADING PLANS — Reuters’ Katanga Johnson: “The head of the U.S. Securities and Exchange Commission (SEC) said on Monday he has asked staff to tighten up a legal safe-harbor that allows corporate executives to buy or sell company stock without running afoul of insider trading laws.
“The ‘Rule 10b5-1’ trading plans allow insiders to execute trades in the company’s stock on a pre-determined future date, providing legal protection against potential allegations of insider trading on material nonpublic information.”
AUTO, STUDENT LOANS FUEL APRIL RISE IN CONSUMER BORROWING — AP’s Martin Crutsinger: “U.S. consumer borrowing rose by $18.6 billion in April, fueled by a big rise in auto and student loans that offset a drop in credit card use.
“The April gain reported Monday by the Federal Reserve was the third straight month of strong increases in consumer borrowing. It followed a similar $18.6 billion increase in March. The latest increase reflected a $20.6 billion increase in the Fed’s category that covers auto and student loans. It was the biggest increase in those loans since a $22.7
YELLEN WON A GLOBAL TAX DEAL, BUT NOW COMES THE HARD PART — NYT’s Alan Rappeport: “Treasury Secretary Janet L. Yellen secured a landmark international tax agreement over the weekend, one that has eluded the United States for nearly a decade.
“But with a narrowly divided Congress and resistance from Republicans and business groups mounting, closing the deal at home may be an even bigger challenge. The Biden administration is counting on more than $3 trillion in tax increases on corporations and wealthy Americans to help pay for its ambitious jobs and infrastructure proposals.”
INSIDE CREDIT SUISSE’S $5.5B BREAKDOWN — WSJ’s Emily Glazer, Maureen Farrell and Margot Patrick: “In mid-March, shares in ViacomCBS Inc. and Discovery Inc. rocketed skyward. That was great news for Bill Hwang. His firm, Archegos Capital Management, had borrowed billions from Credit Suisse Group AG to make wagers on a handful of stocks, including the entertainment companies.
“As is standard practice, Archegos had handed over cash to Credit Suisse to secure its bets. With the stocks more than doubling since the start of the year, Archegos asked for some of that money back, and it was credited, according to people familiar with the matter. … Days later, ViacomCBS plunged, Archegos collapsed and the Swiss bank was stuck with a colossal loss.”
PODCAST: HOW DID THE U.S. RUN OUT OF HOMES TO SELL? — Bloomberg’s Joe Weisenthal: “On the latest episode of the Odd Lots podcast, we spoke with Ali Wolf, the chief economist at Zonda, a housing data and research firm. The topic was simple: How did the U.S. get into this situation where we were out of homes to buy? Whether it’s new homes or existing inventory, would-be buyers have become incredibly frustrated over the last several months.”
TRANSITIONS — Per release: “Sayee Srinivasan has been named chief economist and head of research for the American Bankers Association.”
Coming this summer — Per release: “CBA President and CEO Richard Hunt … announced Acting Comptroller of the Currency Michael Hsu will deliver a keynote address in person at CBA LIVE 2021 on August 18th in Orlando, Florida.”
10 a.m.: The American Enterprise Institute for Public Policy Research holds a virtual discussion on “Is Inflation Back?”