In a research note published by Keyur Parekh, Goldman Sachs advises its customers to buy the stock. The target price remains unchanged at DKK 802.
Wednesday, February 2, 2022
Omicron depresses U.S. private payrolls in temporary setback to labor market
U.S. private payrolls fell for the first time in a year in January as soaring COVID-19 infections disrupted business operations, raising the risk of a sharp decline in employment that would deal a temporary setback to the labor market.
The surprise drop in payrolls in the ADP National Employment report on Wednesday was across all industries and business sizes. It added to a slowdown in manufacturing activity last month in suggesting that the economy lost significant momentum at the start of 2022 as coronavirus cases, driven by the Omicron variant, raged across the nation.
"The good news is that the job market should quickly bounce back as the Omicron variant fades," said Gus Faucher, chief economist at PNC Financial in Pittsburgh, Pennsylvania.
"Underlying demand in the economy is still strong, and businesses are still trying to hire. But the January drop in employment is another reminder that the economy will not fully return to normal until the pandemic is over."
Private payrolls decreased by 301,000 jobs last month, the first drop since December 2020, after increasing by 776,000 in December. Economists polled by Reuters had forecast private payrolls would increase by 207,000 jobs.
The broad decline in private payrolls was led by the leisure and hospitality sector, with 154,000 job losses. Trade, transportation and utilities shed 62,000 jobs. Manufacturing employment decreased by 21,000 jobs. Freezing temperatures last month were also a factor, with construction losing 10,000 jobs.
Employment at small businesses dropped by 144,000 jobs, while medium enterprises laid off 59,000 workers and large companies reduced payrolls by 98,000.
The ADP report is jointly developed with Moody's Analytics and was published ahead of the release on Friday of the Labor Department's more comprehensive and closely watched employment report for January. It has, however, a poor record predicting the private payrolls count in the department's Bureau of Labor Statistics employment report because of methodology differences.
The ADP report counts all active workers as employed regardless of whether they are paid or not during the survey week. In contrast, people who are out sick or in quarantine and do not get paid during the payrolls survey period are counted as unemployed in the BLS survey of establishments even if they still have a job with their companies.
The decline in private payrolls in the ADP report suggests that some workers were laid off because of reduced demand. Businesses were also probably unable to find workers, with so many people at home because of soaring infections.
Stocks on Wall Street were trading higher. The dollar fell against a basket of currencies. U.S. Treasury prices rose.
Graphic: Omicron takes a bite out of private payrolls:
MILLIONS AT HOME
Economic growth slowed in January, with an Institute for Supply Management survey on Tuesday showing its measure of national factory activity falling to a 14-month low.
The economy grew at a 6.9% annualized rate in the fourth quarter, helping to boost overall growth in 2021 to 5.7%, the strongest performance since 1984. Growth estimates for the first quarter are mostly below a 2.0% rate.
According to the U.S. Census Bureau's Household Pulse Survey published in mid-January, 8.8 million people reported not being at work because of coronavirus-related reasons between Dec. 29 and Jan. 10. This has left some economists bracing for a decline on Friday in the nonfarm payrolls count for January.
According to a Reuters survey of economists, nonfarm payrolls likely increased by 150,000 jobs last month. Estimates range from a decrease of 400,000 to an increase of 385,000. The economy created 199,000 jobs in December, the fewest in a year.
The White House has been frantically trying to prepare the nation for a disappointing payrolls number, with several officials offering a preview of the report.
"I think the key point, from our perspective, is the underlying strength of the economy," Jared Bernstein, a member of the White House's Council of Economic Advisers, told CNN this week. "The underlying strength of the job market is ongoing because, as we have seen, the caseloads are turning over."
The United States is reporting an average of 433,601 new COVID-19 infections a day, sharply down from the more than 700,000 in mid-January, according to a Reuters analysis of official data.
Demand for labor is strong, with fewer workers available. There were 10.9 million job openings at the end of December.
Economists expect the Federal Reserve will view a decline in payrolls in January as a blip, given the near-record vacancies.
The Fed last week said it was likely to raise interest rates in March. Economists expect as many as seven hikes this year to tame inflation.
The labor market is already rebounding as the Omicron wave subsides. First-time applications for unemployment benefits have retreated from a three-month high.
"The labor market is still in very good shape, regardless of what numbers print, and that points to continued solid wage increases as well," said Joel Naroff, chief economist at Naroff Economics in Holland, Pennsylvania.
Chinese Scientists Discover 'Godsend' Antibody Cocktail That Can 'Neutralize' Omicron
After a long silence while Beijing insisted - more or less successfully - that SARS-CoV-2 had been annihilated in China, Chiese researchers have once again been producing a flurry of research on the virus's origins, while also claiming new breakthroughs in treatment. They even went so far as to propose a new zoonotic link between the omicron variant and mice.
On Wednesday, we saw that trend continue as a team of scientists from Fudan University claimed to have found a new "godsend" antibody that would magically neutralize omicron and all future strains.
The "surprise" discovery was reportedly made while the team was investigating other strains of the virus, according to their research, which was published on Biorxiv.
According to the leader of the team that carried out the research, the scientists crafted a new antibody cocktail synthesized from human cells produced in response to infections with other variants. To their complete and utter surprise, they found that the cocktail produced an antibody that can magically combat omicron.
Professor Huang Jinghe of Fudan University said in an interview with the SCMP that the new cocktail fought omicron using a series of "combo moves" like in a video game. His team has developed eight different antibody cocktails that they claim are "highly potent" in a short period of time.
As for what the Chinese intend to do with this research, that's not clear - yet.
"There are very few antibodies that can neutralize Omicron in the world. I feel like I’ve been hit by God’s grace," Huang said.
Despite being from different natural antibodies, “have collaborative roles in the neutralization process,” Huang and colleagues said in the paper. The team claims that it developed the cocktail for use on another illness which they refused to identify, before deciding that it had worked "pretty well" and so they should "give it a try" on omicron.
The SCMP noted that antibody treatments have been widely used to fight the pandemic and treat millions of Americans using monoclonal antibody medicines produced by Regeneron and Eli Lilly.
And while we applaud the Chinese for this experimental breakthrough, we can't help but wonder if this antibody combo has been in the back of a lab refrigerator somewhere for the last 2 years.
Readers can find their full report below:
2022.01.30.478305v1.full(1) by Joseph Adinolfi on Scribd
Canadian official says 'significant element' from US involved in anti-vaccine mandate protests
Protests against Canada's COVID-19 measures have drawn a "significant element" from the U.S., Ottawa police said Wednesday.
“They have converged in our city, and there are plans for more to come,” Ottawa Police Chief Peter Sloly said, according to The Washington Post.
The police chief said participants in the protests, including locals, were "putting our city and our residents, our partners and our officers at great risk."
Police said some protesters had received financial backing and other support from across the border, the Post reported.
What started as a "Freedom Convoy" protest against a vaccine mandate for truckers has developed into a broader demonstration against against Prime Minister Justin Trudeau's policies, reaching the capital of Ottawa.
Protests have blocked Canadian streets and shut down businesses the past six days. Reports indicated that one lane of traffic in each direction along part of the U.S.-Canada border in Alberta had been opened after protestors had blocked traffic there since Saturday, according to the Post.
Canadian officials have condemned the protestors' blockade.
“What may have begun as a peaceful assembly quickly turned into an unlawful blockade,” Alberta’s Royal Canadian Mounted Police said Tuesday in a statement.
Ottawa's police said the protests have prompted “several criminal investigations” into “threatening” and “illegal” behavior such as defacing the National War Memorial and intimidating police and others including staffers at a local soup kitchen, the Post added.
“We are trying to be responsible, lawful, ethical and measured,” Sloly said. “The longer this goes on, the more I am convinced there may not be a police solution in this demonstration.”
The protests began over an announcement made last year when the U.S. and Canada mandated COVID-19 vaccines for truck drivers, a policy that went into effect last month.
But on Saturday, the Canadian Trucking Alliance said many people at the protest, which had developed into a broader demonstration, “do not have a connection to the trucking industry.”
Revenue windfall pushes states to consider range of tax cuts
Soaring tax revenue and billions in pandemic aid from the federal government have left many states with an unusual problem — too much money.
The result is one of the most broad-based movements in recent memory toward giving consumers and taxpayers a break. In red states and blue, lawmakers and governors are proposing to cut taxes and fees, create tax credits, or delay tax and fee hikes that had been planned before the COVID-19 pandemic struck.
Even high-tax states controlled by Democrats, from California to New Jersey, are dangling the possibility. Among those are Washington state, where one Democratic senator has proposed cutting the state sales tax from 6.5% to 5.5%.
“We need to get money back in people’s pockets if we’re to make a full recovery from the high public health cost and economic cost of this pandemic,” said state Sen. Mona Das, the Democrat who proposed the measure. Legislative leaders in her party are cool to the idea of using temporary revenue to finance permanent cuts, but some have rallied behind a one-time sales tax holiday proposal.
States coffers are overflowing after nearly two years of Congress pumping out trillions to help the U.S. economy stay afloat through the pandemic, including sending billions to state governments. Most are enacting or considering tax cuts even while considering big boosts on public schools and infrastructure.
Income and sales taxes are on the chopping block as are vehicle license fees, gas taxes and more.
In Maryland, Republican Gov. Larry Hogan has long pushed for a gradual elimination of income taxes for retirees, something he says will reduce the migration of people leaving the state to lower-tax places such as Florida when they’re finished working. He may finally have a window for striking a deal with the Democrat-controlled legislature.
The state’s projected surplus for the fiscal year that starts July 1 is $4.6 billion in a $58.2 billion budget. That is giving Hogan leeway for a renewed effort to sell his plan. As part of the deal, he’s also calling for making permanent an enhanced income tax credit favored by Democrats for lower-income workers that was put into place last year as a temporary measure.
“We now can afford to do this,” Hogan told reporters at the start of this year’s legislative session.
The idea is appealing to retirees such as Karen Morgan, a lawyer who worked for the state legislature and lives in a Maryland suburb outside Washington, D.C.
“It would be nice to not have to spend some of these limited resources on taxes, and that means that there is extra money to spend on health care,” said Morgan, 65. “There’s extra money to spend on just managing my life. You know, it doesn’t get any easier the older you get.”
For Maryland and other state governments, the fiscal fallout from the pandemic has turned out to be the opposite of the calamity they were bracing for in the spring of 2020.
The federal government has allocated states and local governments about $500 billion in general relief, plus more for specific areas such as education. It has offered separate aid to businesses and committed to $1 trillion in infrastructure spending, with much of that money funneled through states.
And most high-earners avoided layoffs during the pandemic and investors have done well — keeping income tax receipts high. Consumers have used that money to buy a lot of goods: home-office furniture, patio heaters, vehicles. That’s sent sales tax revenue, a key source of government income in most states, soaring.
“States have more money than they can realistically and sustainably spend,” said Jared Walczak, vice president of state projects at the Tax Foundation, a Washington-based think tank that advocates for tax policies fostering growth.
Walczak counted 16 states with income tax cuts last year, including a move toward a flat tax in Arizona and a sweeping one in Arkansas that was passed alongside a tax credit for low-income earners. The Urban Institute tallied 29 states that cut taxes or expanded tax credits last year.
Walczak says more than a dozen states are seriously considering income tax reductions this year.
He said states need to consider tax cuts because the pandemic made it clear that many people can move to a more desirable place and keep working remotely. But some plans might go too far — and some tax cuts could end up disproportionately hurting those on lower incomes.
A proposal in Republican-dominated Mississippi to phase out the personal income tax could drag down revenue enough to force cuts in state government spending in future years. The plan already has passed in the House, but Senate Republicans are calling for shallower cuts.
In addition to the income tax proposal, the House bill would reduce the taxes people pay each year to renew license plates for their vehicles and cut the sales tax on groceries. But the sales tax on most other items would rise from 7% to 8.5%.
“The end result would be a tax code that rewards work and is fairer for everyone,” said Republican state Rep. Trey Lamar, chairman of the tax-writing House Ways and Means Committee.
But Deloris Suel, 73, isn’t convinced the broader sales tax boost — which is not included in the Senate GOP plan — would be fair. She operates a child care center in Jackson and said the changes would end up costing the low-income families her center serves. Suel said a higher sales tax would hit them hard and would not be balanced by eliminating the income tax because many of them make too little to be required to pay it now.
Suel said lawmakers should evaluate the impact of tax cuts before rushing to make a decision.
“Sometimes, Mississippi joins in for the sake of being part of something,” she said.
An analysis by One Voice, which advocates for vulnerable and marginalized people, found that the tax plans would save $30,000 a year for the highest-income people in the state but increase the overall tax burden slightly for those making under $19,000.
Seeking more widespread benefits, taxes on groceries, which are in place in about a dozen states, are being targeted.
That includes Illinois, where the governor has proposed a one-year suspension that would save consumers in the state a collective $360 million. Democratic Gov. J.B. Pritzker has pitched it as a way to combat inflation, along with relief at the gas pump and on property tax bills.
In Oklahoma, where the GOP-led legislature cut individual and corporate income tax rates last year amid higher-than-expected revenue, some Republicans are talking about even more tax cuts, including the sales tax on groceries.
Rep. Sean Roberts, a Republican who also is running for Congress, wants a public vote on whether to remove the grocery tax.
“We currently have a surplus in funds and revenues are up, so now is the time to bring this much-needed relief to Oklahoma families,” he said.
Tax and fee cuts are on the table in Colorado, New York, Rhode Island and Utah. Even in tax-happy California, Democratic Gov. Gavin Newsom is proposing delaying the next step in a multi-year increase in the gas tax.
But some economists caution that states should be careful about making permanent tax cuts, noting the flush times won’t last forever.
“What goes up must come down,” said Michael D’Arcy, who follows public finance for Fitch Ratings.
Alaska Speaker: ‘Large portion’ of House members exposed to virus
The Alaska House speaker on Wednesday said a “large portion” of Alaska state representatives had been exposed to COVID-19. That scuttled plans for a formal floor session and left unresolved a proposal to remove from legislative committees a representative who has acknowledged being a member of the Oath Keepers far-right organization.
The House on Monday tabled consideration of the proposed action against Republican Rep. David Eastman, and it wasn’t immediately clear when the matter might come up again. The House did not meet Tuesday and held a so-called technical session Wednesday, during which no formal business was taken up.
Joe Plesha, communications director for the House’s bipartisan majority, said it was determined Tuesday that “roughly half the members in this body were close contacts to a positive case. It is still being determined who has to quarantine based on their vaccination status.”
House Speaker Louise Stutes was not immediately available for comment Wednesday. The House is next scheduled to meet Friday.
A legislative panel on House committees voted 5-2 Monday to remove Eastman from committee assignments, with the dissenting votes coming from two minority Republicans, Plesha has said. There was little public notice ahead of the meeting, and Eastman has criticized what he called a lack of transparency around the action. Eastman is part of the 18-person Republican minority.
He said Wednesday that he is active on the committees on which he sits. “As important as that is, I won’t compromise my integrity to stay on those committees,” he said.
A leader of the Oath Keepers and other members or associates have been charged with seditious conspiracy related to the insurrection at the U.S. Capitol on Jan. 6, 2021. Eastman has said that he did not condone the storming of the Capitol.
Eastman last week told The Associated Press he joined the Oath Keepers “a little over 12 years ago. Along with 38,000 others who have committed to honoring the oaths we have taken.”
In a post on his website, he described his connection with the group as “slight” but also said he refused to “throw the law-abiding members of Oathkeepers to the Cancel Culture wolves.”
Ivan Hodes was among the West Point graduates who last year called on Eastman, a fellow graduate, to resign. Hodes also has supported calls to expel Eastman. Hodes said there should be a debate on the House floor about Eastman’s membership in the Oath Keepers and how that reflects on the House as an institution.
House Minority Leader Cathy Tilton has said it’s a “slippery slope” for the Legislature to make determinations about a person’s involvement in an organization. Tilton has noted that there have been no charges against Eastman.
https://apnews.com/article/coronavirus-pandemic-health-alaska-93015babcaab8941622a056d1cc041a6
Appeals court restores Tennessee Down syndrome abortion ban
A federal appeals court on Wednesday once again reinstated a Tennessee ban on abortions because of a prenatal diagnosis of Down syndrome, or because of the race or gender of the fetus.
The ban is part of a sweeping anti-abortion measure that has faced multiple legal challenges since it was enacted in 2020 by Republican Gov. Bill Lee. Notably, the law banned abortion as early as six weeks — a time frame when most women don’t know they’re pregnant — but that portion has remained blocked from going into effect.
In Wednesday’s decision, the 6th U.S. Circuit Court of Appeals granted the request by the Tennessee attorney general’s office to reverse course and temporarily allow the so-called reason ban to be enforced. The 6th Circuit had blocked that provision in September after previously allowing it to go into effect in 2020.
The back-and-forth over the reason ban comes after the same federal appeals court signaled in December that it might be willing to allow Tennessee’s fetal heartbeat measure to be implemented. The court vacated a previous decision made by the appeals court’s three-judge panel and scheduled a rehearing before the full court.
In a four-page dissent, Circuit Judge Karen Nelson Moore wrote that the appeals court was refusing to schedule the hearing until the U.S. Supreme Court handed down its decision on whether to uphold Mississippi’s ban on abortions after 15 weeks of pregnancy. The decision could dramatically limit abortion rights in the United States. According to Moore, the appeals court is waiting to see if the high court’s decision will affect Tennessee’s case.
“(These) stay-and-delay tactics subvert the normal judicial process, harming both the substance of our ultimate decision and our court’s legitimacy,” she added.
Attorneys representing the plaintiffs, which include reproductive rights advocates and health clinics that provide abortions, criticized Wednesday’s ruling.
“Pregnant people are the ones best suited to make decisions about their own pregnancies, and politicians should not get to interrogate a person’s reasons for seeking an abortion,” Rabia Muqaddam, staff attorney at the Center for Reproductive Rights, said in a statement. “These bans are blatantly unconstitutional.”
A spokesperson for the attorney general’s office did not immediately return a request for comment.
The plaintiffs also have argued the ban was improperly vague, claiming the law failed to provide clear guidelines for abortion providers to avoid criminal prosecution.
Currently, more than a dozen states have similar reason bans in place. However, even Tennessee’s state attorneys have acknowledged that it would be incredibly difficult for a prosecutor to prove that a physician knew in advance that a woman was seeking an abortion because of a Down syndrome diagnosis. The law calls for criminal penalties against doctors who violate it.
Down syndrome is a genetic abnormality that causes developmental delays and medical conditions such as heart defects and respiratory and hearing problems.
According to the National Down Syndrome Society, about one in every 700 babies in the United States — or about 6,000 a year — is born with the condition, which results from a chromosomal irregularity. There are no official figures on how many prenatal diagnoses of Down syndrome prompt a decision to abort; a 2012 study by medical experts estimated the abortion rate was 67%.
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