Daily Comment (July 16, 2021)

by Bill O’Grady, Thomas Wash, and Patrick Fearon-Hernandez, CFA

[Posted: 9:30 AM EDT] | PDF

Good morning, all! U.S. equities appear to be headed for a higher open this morning. The overnight news was rather quiet. Our report begins with international news and discussions about rising tensions between Poland and the EU, Iranian hackers targeting workers in the defense industry, and the flood in western Europe. U.S. economics and policy news are up next, including an update on the protests in Cuba and the infrastructure bill. China news follows, and we end with our pandemic coverage.

International news:  Flood in western Europe, defense workers being targeted by Iranian hackers, and rising tensions between the EU and Poland.

  • African nations are planning to lower intercontinental tariffs and are looking to raise $8 billion to offset the loss of tariff revenue. The decision is designed to make intra-trade within Africa relatively easier.
  • On Thursday, a flood in Germany and Belgium caused by record rainfall across western Europe led to 100 confirmed deaths and more than 1,000 people feared missing.
  • A secretive Israeli spyware company, Candiru, sold its software exclusively to governments. The software makes it easy for states to hack into iPhones, Androids, Macs, PCs, and cloud accounts. It has been used by governments to monitor and track dissidents.
  • Poland and the European Union continued their six-year feud over the rule of law. On Thursday, the European Court of Justice ruled that Poland’s system of overseeing and disciplining judges is not compatible with EU law. In response, Poland has argued that the ruling goes against the Polish constitution. If Poland persists with its oversight system, the commission could ask the court to impose daily fines.
  • Russia banned an investigative website that published a report suggesting that President Vladimir Putin secretly fathered a child outside of his marriage. The publisher of the report, Proekt Media, is based in the U.S.; however, anyone associated with the site potentially faces a prison sentence.
  • Facebook (FB, $344.46) announced that it removed several accounts connected to a group of Iranian hackers that targeted employees of defense and aerospace industries in the U.S. and Europe.
  • The European Central Bank is expected to maintain its policy accommodation for the foreseeable future, according to a Bloomberg survey of economists.

 Economics and policy: U.S. issues warning about business in Hong Kong, a U.S. tech firm is in talks to purchase its own foundry, and the Biden administration is exploring ways to restore the internet in Cuba.

 China: Beijing gives exemption for firms listing in Hong Kong, China is growing uneasy about U.S. troop withdrawal from Afghanistan, and pork prices fall in China.

COVID-19:  The number of reported cases is 189,024,605 with 4,068,772 fatalities.  In the U.S., there are 33,977,713 confirmed cases with 608,406 deaths.  For illustration purposes, the FT has created an interactive chart that allows one to compare cases across nations using similar scaling metrics.  The FT has also issued an economic tracker that looks across countries with high-frequency data on various factors.  The CDC reports that 388,738,495 doses of the vaccine have been distributed with 336,054,953 doses injected.  The number receiving at least one dose is 185,135,757, while the number of second doses, which would grant the highest level of immunity, is 160,408,538.  The FT has a page on global vaccine distribution.

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