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Sunday, July 14, 2019

China second quarter GDP rises 6.2% year-on-year, slowest in at least 27 years

China’s second-quarter economic growth slowed to its weakest pace in at least 27 years, in line with expectations, as demand at home and abroad cooled in the face of a bruising trade war with the United States.

The economy grew 6.2% in the second quarter from a year earlier, slower than 6.4% in the first quarter, the National Bureau of Statistics said on Monday.
Analysts polled by Reuters had expected the economy to have expanded 6.2%, which would be the slowest pace since the first quarter of 1992, the earliest quarterly data on record.
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KEY POINTS
* Q2 GDP +6.2% y/y (f’cast +6.2%, prev +6.4%)
* Q2 GDP +1.6% q/q (f’cast +1.5%, prev +1.4%)
* June industrial output +6.3% y/y (f’cast +5.2%, prev +5.0%)
* June retail sales +9.8% y/y (f’cast +8.3%, prev +8.6%)
* Jan-June fixed asset investment +5.8% y/y (f’cast +5.5%, Jan-May +5.6%)
* China Jan-June property investment +10.9% y/y
COMMENTARY:
STEVE COCHRANE, CHIEF APAC ECONOMIST, MOODY’S ANALYTICS, SINGAPORE
“It sounds like if retail sales are up as strong as they are, the domestic side has recovered a bit based on stimulus. So, it all may be temporary, especially if industrial production is only around 5%.
“Shifting the reserve requirement down would be an easy thing for the PBOC to do. The trick is to try to channel any additional liquidity towards small enterprises and the private sector where they can do the most good. That may be harder said than done. I also think we are in a wait-and-see mode if the United States and China will get back together again.”
“Our primary assumption for the second half is that the talks will resume. If they don’t, I would pull my growth forecasts for the second half down.”
AIDAN YAO, SENIOR ASIA EMERGING MARKETS ECONOMIST, AXA INVESTMENT MANAGERS, HONG KONG
“There’s a lot of talk about support for big item consumption but we haven’t seen that coming through and there’s been talk about RRR cuts and big monetary stimulus and we haven’t really seen any big bazooka being put out.
“They are behaving a lot more cautiously. We do expect more measures to be rolled out. They’ve certainly done a lot more (liquidity management) over the last few weeks.
“If push comes to shove they have more scope to cut taxes and fees… and they could fulfil market speculation of another round of auto subsidies to boost consumption.
“Fiscal policy is likely to be in the driving seat and monetary policy will act in a supportive role in the coming months.
“Cutting the benchmark deposit and lending rates — the likelihood is very low. It’s more possible (that) they twist the market-oriented rates — cutting the interest rates of all those liquidity facilities also sends an important signal to the market.”
BEN JARMAN, ECONOMIST, JPMORGAN CHASE, SYDNEY
“These are generally stronger numbers than we had thought. We are seeing a broad upside surprise.”
“Policy in China is working under constraints at the moment as they are trying to achieve multiple objectives. They want to support growth via infrastructure and consumer spending, but they are also careful not to re-ignite a housing bubble. So to that extent, it means the pressure is off in the near term to do more on policy.”
BACKGROUND:
– China’s economy has been slowing since last year as the trade war with the United States took a toll on factory activity, exports and domestic demand, suggesting that a spate of stimulus measures – including tax cuts and easier lending rules – have yet to have a notable effect on overall growth.
– Washington sharply raised tariffs on $200 billion of Chinese goods in May, increasing the strain on a struggling manufacturing sector and threatening to crush already-thin profit margins.
– Though both sides agreed in late June to resume negotiations, and Washington said it would hold off on additional levies, existing tariffs remain in place.
– No time frame has been set for the new round of trade talks, and Beijing and Washington remain at odds over significant issues.
– The government has been leaning more on fiscal stimulus to underpin growth this year, announcing massive tax cuts worth nearly 2 trillion yuan ($291 billion) and a quota of 2.15 trillion yuan for special bond issuance by local governments.
– The People’s Bank of China (PBOC) has slashed banks’ reserve requirement ratio (RRR) six times since early 2018 to turn around soft credit growth. It has also injected large amounts of liquidity into the financial system and guided short-term interest rates lower.
– But the economy has been slow to respond, and investors fear a longer and costlier trade war between the world’s two largest economies could trigger a global recession.
– Markets are eagerly waiting to see whether the PBOC will follow policy moves by the U.S. Federal Reserve, which is widely expected to cut rates at its meeting at the end of this month.
– China’s economic growth is expected to cool to 6.2% this year, a 29-year low, according to a Reuters poll. The economy grew 6.6% last year.
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U.S. Fed seen launching repo facility in early 2020 – Deutsche Bank

The Federal Reserve may launch a policy tool to lend to banks using Treasuries and other securities as collateral in early 2020, with possible testing to begin later this year, a Deutsche Bank strategist said.

Such a standing fixed-rate repurchase agreement, or repo, facility would serve as a backstop against sharp spikes in interest rates in money markets, which are occurring with growing frequency at month- and quarter-end.
“We reaffirm our expectations that the Fed could test this facility later this year and launch it for full-scale operations in early 2020,” Deutsche Bank strategist Steven Zeng wrote in a research note published late on Friday.
Fed policymakers debated the merit of a repo facility in June. There is no consensus yet on the design of the facility.
Other Wall Street analysts questioned whether a repo facility would happen any time soon when the central bank may end its balance sheet normalization and restart its purchases of Treasuries sooner than it has planned.
“Our base case remains for this facility to be implemented eventually, but we think it can take longer than we previously expected – around Q3 2020 – given diverse opinions on the parameters from the participants,” Citi Research rates strategist Steve Kang wrote in a research note.
Still, the Fed and financial markets stand to benefit from a repo facility, Deutsche Bank’s Zeng said.
For the Fed, such a programme could shrink more of its balance sheet, currently at $3.86 trillion (3.1 trillion pounds), and may discourage big banks from hoarding reserves, resulting in more even distribution of reserves to smaller banks, he said.
For traders and investors, a repo facility could support Treasuries trading volumes and liquidity by offering more flexibility to banks to move between holding reserves and holding securities, he said.
Big U.S. banks have clung to a large share of excess reserves, rather than lending them, partly to meet liquidity requirements enacted in response to the global financial crisis a decade ago.
More bank demand for Treasuries could help lower bond dealer holdings of them. Dealers’ need for financing to hold their Treasuries inventory has contributed to the intermittent spikes in repo rates on the open market, he said.
The Fed may initially set the facility’s fixed rate at 35 basis points above the interest the Fed pays on bank reserves. The spread could be adjusted up or down, Zeng said.
He reckoned the Fed would allow banks and primary dealers, or the top 24 Wall Street bond firms that do business directly with the Fed, to access the repo facility.
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Rising minimum wage a factor in 4-star nursing home’s closure

A four-star rated nursing home in Washington state will close in September, citing a lack of state financial support that is putting pressure on many of the state’s long-term care providers.
Park Royal Health and Rehabilitation Center in Longview announced the news last week.
Robin Dale, CEO of the Washington Health Care Association, said new minimum wage rates have underscored the struggle for providers like EmpRes Healthcare Management, which operates Park Royal and 18 other senior care facilities in Washington.
The state’s starting pay jumped 50 cents to $12 an hour in January, with the law calling for an increase to $13.50 an hour next year. The state’s minimum wage was $9.47 as recently as 2016.
“This results in insurmountable losses for facilities like Park Royal,” Dale told The Daily News. “We fear there are more nursing home closures on the horizon.”
About 60% of residents in Washington skilled nursing facilities are on Medicaid, and their payments are based on estimates of 2016 costs that have not been adjusted for inflation or increased staffing costs.
The direct care shortfall is now roughy $43 per patient day. The rate, unaddressed by state lawmakers in 2018, will be almost four years behind by the time it gets updated in 2020, Dale said.
“They’re going to have to address this,” Dale said. “The only question is how many facilities will close between now and then or between now and 2020.”
Park Royal’s planned closure is the state’s 17th nursing facility since 2017 to say it was shutting down due at least in part to the rising gap between Medicaid funding and the actual cost of caring for patients, according to the Washington Health Care Association.
Officials are working with the state to find new homes for the 38 residents who are living at the 50-bed facility.
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Rockland County hospital tackles measles with pre-hospital triage


The Twiage app helps EMS alert the hospital fast if a measles patient is on the way.

Late last year, an ambulance brought a sick child to the emergency department at Montefiore Nyack Hospital in New York. Providers began evaluating the patient’s symptoms, including a pretty bad fever and rash, working to diagnose the unidentified viral syndrome—and soon, the team made an unfortunate discovery.
“It turned out to be measles,” said Dr. Jeffrey Rabrich, the hospital’s medical director for emergency medicine. “As a result of that, we had some exposure of people who happened to be in the emergency department at the same time.”
Measles cases, which in May hit their highest level nationwide since 1992, continue to tick upward, with five counties in the U.S. suffering from ongoing outbreaks. That includes Rockland County, N.Y., home of Montefiore Nyack. There have been at least 275 confirmed cases of measles in the county since the outbreak began last year, according to the Centers for Disease Control and Prevention.
That places a huge responsibility on local hospitals and clinics, with providers tasked with caring for measles patients while working to reduce exposure to the virus. Healthcare facilities are one of the most common points of exposure for measles, according to Dr. Matthew Zahn, chair of the Infectious Diseases Society of America’s public health committee. “Even casual contact in the same closed air space to a person potentially spreads that virus,” he said.
That has both medical and cost implications for the broader region.
Public health agencies in New York City spent nearly $400,000 on efforts to control a measles outbreak in 2013, according to a study published last year in JAMA Pediatrics. The measles outbreak in question involved 58 reported cases of measles.
To battle the problem, Rabrich had an idea: build a measles alert directly into Montefiore Nyack’s pre-hospital communication system, an IT system that enables emergency medical services to send patient data—including text, photo and video documentation—to the ED in real-time while en route to the hospital using an app.
Montefiore Nyack began using the IT system, developed by a company called Twiage, a year and a half ago.
With the measles outbreak in mind, Rabrich approached Twiage CEO John Hui about integrating a new feature that would prompt first responders to assess whether a patient exhibits measles symptoms in the ambulance—and just a few weeks later, Montefiore Nyack’s pre-hospital communication system went live with a new measles alert.
Now, once EMS identifies a likely measles case, they can deliver an alert about the potential infection directly to Montefiore Nyack’s charge nurse in the ED. Armed with this data, ED staff can arrange to transfer an incoming patient to the department’s isolation room as soon as the ambulance arrives.
Since its launch this past spring, the alert has already been activated a few times, Rabrich said.
Twiage has since reached out to other hospitals it contracts with to offer access to the measles alert, and about a half-dozen hospitals—including Good Samaritan Hospital, also based in Rockland County—have signed up for it to date, Hui said.
The project is one reason Hui was a finalist in the Heritage Provider Network’s Healthcare Innovation Awards this past spring, an annual awards ceremony the managed-care organization hosts in partnership with Modern Healthcare’s sister publication Crain’s New York Business to recognize innovators improving access to and quality of care in the New York metro area.
To continue to reduce risk, Zahn said, hospitals must also establish a plan of action for when a potential measles patient arrives—that can mean directing a patient to an isolation room like at Montefiore Nyack, waiting to see them at the end of the day, or even evaluating a patient outside the walls of the facility, away from closed air environments.
“To make sure that you avoid these inadvertent healthcare exposures to measles, there’s a lot of layers and a lot of different parts of a plan that need to be put together,” he said.
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Alector to Present at 2019 Alzheimer’s Association

Alector, Inc. (Nasdaq: ALEC), a clinical-stage biotechnology company pioneering immuno-neurology, a novel therapeutic approach for the treatment of neurodegeneration, today announced that the company will present clinical data from its AL001 program and preclinical data from its AL002 program at the 2019 Alzheimer’s Association International Conference (AAIC). The conference is being held July 14-18, 2019 in Los Angeles.
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Neurotrope to Present Phase 2 Design at Alzheimer’s Association

Neurotrope, Inc. (Nasdaq: NTRP), a clinical- stage biopharmaceutical company developing novel therapeutics for neurodegenerative diseases, including Alzheimer’s disease (“AD”) is announcing that Dr. Daniel L. Alkon, the Company’s President and CSO, will be honored among the recipients of the Cure Coin Award, at the InvestAcure Cure Coin Awards Reception on July 15, 2019 during the Alzheimer’s Association International Conference in Los Angeles.
“We are proud to honor Dr. Alkon for his work in the development of Bryostatin, a natural compound showing promise in restoring synaptic networks in the brain, preventing neuronal death, clearing Tau and Amyloid buildup, and reversing Alzheimer’s memory loss even for patients with late-stage disease,” said Max Tokarsky, Founder & CEO of InvestAcure, PBC.
The award reception will bring together key stakeholders in the battle against AD, Dementia and CTE to honor industry scientists working to develop groundbreaking discoveries into effective treatments.  NFL ‘super-agent’ Leigh Steinberg and former Vice Chairman of the NASDAQ David Weild IV are scheduled to host and keynote the event. The event program will also feature a presentation by InvestAcure, PBC Founder and CEO, Max Tokarsky, on their plans to drive $1 billion in annual investment for AD R&D until a cure is found.
The reception will be held at 7:00 p.m. at The Association on 110 E 6th Street in Downtown Los Angeles. InvestAcure welcomes members of the press to request attendance at the event. The event is expected to be at capacity, so please register as soon as possible. For additional details and registration, please visit the event page.
Neurotrope’s Chief Executive Officer, Dr. Charles S. Ryan, will present the design of its confirmatory Phase 2 double blind, placebo controlled clinical trial of bryostatin-1 in the treatment of moderate to severe Alzheimer’s dementia.  The study design will be presented as a poster and Dr. Ryan will deliver an oral presentation.  “We are delighted that the work of Dr. Alkon will be recognized, and look forward to the opportunity to present details of our confirmatory trial that will inform the development of a pivotal trial protocol for Bryostatin-1 in moderate-to-severe AD patients,” said Dr. Ryan.
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Two Genes May Act as On/Off Switches for Neuroinflammation, Alzheimer’s Disease

As the beta-amyloid theory of Alzheimer’s disease fades from prominence, many researchers are turning their attention to the role of inflammation. Although beta-amyloid is still very much a factor in the disease, many believe that it is an uncontrolled or faulty inflammatory and immune reaction to beta-amyloid that causes the majority of the cognitive damage. As a result, many researchers are shifting focus to the role of microglial cells, which are specialized immune cells in the central nervous system, and the potential use of anti-inflammatories in prevention and treatment.
Researchers with Massachusetts General Hospital (MGH) have identified some crosstalk communication between TREM2 and CD33, two genes that play a role in inflammation and Alzheimer’s disease. CD33 carries the genetic code for receptors on microglia cells. TREM2 has the opposite effect, shutting down microglia’s ability to promote neuroinflammation.
Rudy E. Tanzi, director of the Genetics and Aging Research Unit at MGH and senior author of the study, which appeared in the journal Neuron, says that CD33 is the “on” switch for neuroinflammation and TREM2 is the “off” switch.

“The Holy Grail in this field has been to discover how to turn off neuroinflammation in microglia,” Tanzi stated.
At the heart of the research was the question, what happens if the genes are silenced, simultaneously or individually?
Studying laboratory mice specially bred as Alzheimer’s disease models, the scientists tested started by looking at a strain of AD mice whose CD33 genes were turned off. These mice had decreased levels of beta-amyloid in their brains and did a better job in various learning tests, like running a maze. But when CD33 and TREM2 were silenced, the benefits disappeared. That also happened when a single TREM2 gene was silenced.
“That tells us that TREM2 is working downstream of CD33 to control neuroinflammation,” Tanzi stated. “
Further, they sequenced microglia RNA, which showed that both CD33 and TREM2 regulate neuroinflammation by increasing or decreasing the activity of a type of immune cell called IL-1 beta and the cell receptor IL-1RN.
“We are increasingly realizing that to help Alzheimer’s patients, it is most critical to stop the massive brain nerve cell death that is caused by neuroinflammation,” Tanzi stated. “We now see that the CD33 and TREM2 genes are the best drug targets for achieving this goal.”
This theory is also supported by a recent report that put Pfizer under fire. In 2015, Pfizer researchers were analyzing hundreds of thousands of insurance claims and noted that patients receiving the company’s Enbrel, a powerful anti-inflammatory, seemed to have a reduced risk of Alzheimer’s disease—by a startling 64%.

The scientists in Pfizer’s inflammation and immunology division pushed management to run a clinical trial. The estimated cost of the trial would be $80 million, but if it panned out, it would open up a huge market for the drug, whose sales are on a downward slope, victim of the patent cliff, and the company is focused on its replacement, Xeljanz, even though Enbrel brought in $2.1 billion in 2018.
Recently released documents indicate that Pfizer spent three years reviewing whether the science supported running a trial on Enbrel in Alzheimer’s. A PowerPoint slide from a February 2018 presentation stated, “Enbrel could potentially safely prevent, treat and slow progression of Alzheimer’s disease.”
As the Alzheimer’s Association International Conference (AAIC) 2019 is being held this weekend in Los Angeles, there is likely to be published numerous posters and presentations discussing the role of inflammation in the disease.
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