COVID-19 Bulletin: August 13

Good Afternoon,

Supply

Crude prices were down in early trading today, with the WTI at $42.57/bbl and Brent at $45.26/bbl.
The Energy Information Agency lowered its estimate for U.S. oil production this year, now expecting daily output to drop by 990,000 barrels a day. 
Oil-rich Alberta, home of Canada’s oil sands industry, sees opportunity in driving a shift to hydrogen production.
The government of Mauritius declared a state of environmental emergency in the wake of an oil spill near its pristine coral reefs. Citizens are donating their hair for makeshift absorbent sacks to soak up the oil.

Supply Chain

Six hundred thousand people remained without power yesterday from the derecho that struck the Midwest with hurricane force winds on Monday.
Exploiting rising tensions between the U.S. and China, Mexico is promoting a “relocation strategy” to encourage companies to move factories and supply chains to the country.
Freight markets remain challenged. Clients are advised to provide expanded lead times on orders to help ensure delivery dates will be met.
We’re seeing rising spot freight pricing due to capacity constraints in the industry.
Beyond the transportation challenges, our Gold Standard logistics partners and U.S. ports continue to operate without interruption.

Markets

First-time unemployment claims of 963,000 last week marked the first time in 21 weeks that filings fell below 1 million.
The federal deficit topped $2.8 trillion through July with two months left in the fiscal year, more than triple last year’s deficit.
Budget woes are cascading through state and local governments, forcing them to slash payrolls and cut services to address yawning deficits.
Ninety percent of U.S. cities surveyed expect their fiscal challenges to be worse in 2021 than this year.
Stalled negotiations on an additional stimulus package threatened to drag into September as congressional and White House officials refused to even meet.
The U.S. dollar, which hit a two-year low last week against an index of foreign currencies, fell relative to currencies of major trading partners yesterday on concerns about stimulus negotiations.
Federal Reserve officials criticized states that reopened too early and warned that the inconsistent approach to controlling the pandemic is prolonging a recovery.
The Consumer Price Index rose 0.6% in July from June, twice the rate that economists expected. Excluding food and energy, the core inflation rate rose at the highest pace since 1991.
The U.S. suffered nearly 1,500 COVID-19 deaths yesterday, the highest daily count since May.
Deaths in the U.S. since March are more than 200,000 higher than normal, suggesting the toll from COVID-19 may be 60,000 higher than reported. 
Falling U.S. case counts correspond to a drop in COVID-19 testing, causing concerns that official numbers are understated.
Two recent cases in China suggest that COVID-19 can linger and reappear months after victims test negative.
Labor shortages at production facilities could hinder the auto industry’s recovery.
John F. Kennedy International Airport is testing thermal imaging technology to screen passengers for COVID-19. 
Discount retailer Stein Mart joined a growing list of retailers filing for bankruptcy. The firm will liquidate, closing all its nearly 300 stores.
Mall managers Brookfield Property Partners and Simon Property Group, landlords to many J.C. Penney anchor stores, are among the top bidders for the company’s retail operations in bankruptcy court. 
In a sign of the decline of the central office, retailer REI is seeking to sell its new headquarters building in Bellevue, Washington, to raise cash before even moving in.
Median rents fell 10% in Manhattan as landlords struggle to stem an exodus of urban residents.
In a study by Duke University, disposable polypropylene masks were among the most effective in protecting against COVID-19 infection, while bandanas, handkerchiefs and neck gaiters were among the least.
U.S. deaths from COVID-19 topped 166,000 yesterday.

International

Germany had its highest daily COVID-19 case count since May as returning vacationers spawned outbreaks throughout the country.
Belgium, France and Spain also are experiencing concerning COVID-19 outbreaks.
India registered a record 67,000 new COVID-19 cases, the fifteenth consecutive day with more than 50,000 new cases. India moved ahead of the U.K. for the fourth most COVID-19 deaths among nations.
Escalating tensions between the U.S. and China are creating fears of a financial decoupling, whereby China could bypass dollar settlements and further roil global markets. The tensions and global recession are prompting an inward shift in China’s economic policy with a drive to promote domestic consumption.
Taiwan is seeking to begin free trade talks with the U.S., which would further elevate tensions between the U.S. and China.
China warned citizens about the risk of COVID-19 virus discovered on chicken wings imported from Brazil. The notice follows earlier warnings about the virus found on packaging for imported seafood.

Our Operations

We are proud that Crain’s Chicago Business has ranked M. Holland as one of its Top 100 Best Places to Work.
Join us for our next Fireside Chat on August 19. Panelists from M. Holland and Plante Moran will discuss the new USMCA and how it will impact businesses, the economy and the plastics industry. For more information and to register, please visit our website.
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Thank you,