Week of April 8, 2022 Weekly Recap & The Week Ahead
“Willingness and ability to hold funds uninvested while waiting real opportunities is the key to success in the battle for investment survival” — Gerald Loeb
1. Congressional Negotiators Settle on $10 Billion for Covid-19 Tests, Treatments — the package will allow the U.S. to purchase supplies, including more tests and vaccines, that the Biden administration said would be needed to continue to fight the virus. The $10 billion pulls from unused money in earlier bills passed by Congress, rather than representing new spending. Top U.S. health officials have been closely monitoring the Omicron BA.2 variant, which has triggered a surge in cases in parts of Europe and Asia, and now represents more than half of new Covid-19 cases in the U.S. President Biden said last week that without more federal dollars, another wave of the virus could lead to testing shortages similar to those experienced during the winter’s Omicron surge.
2. Fed Lays Out Plan to Prune Balance Sheet by $1.1 Trillion a Year — Federal Reserve officials laid out a long-awaited plan to shrink their balance sheet by more than $1 trillion a year while raising interest rates “expeditiously” to counter the hottest inflation in four decades. The roadmap for reducing the assets they bought during the pandemic was spelled out on Wednesday in minutes of their March meeting, when officials raised rates by a quarter point. They debated going bigger but chose caution in light of the uncertainty caused by Russia’s invasion of Ukraine, the record of their discussion showed.
3. U.S. Allies to Release Close to 60 Million Barrels of Oil From Reserves — U.S. allies are planning to release close to 60 million additional barrels of oil from their reserves, officials familiar with the matter said, joining the Biden administration in an effort to tame prices after they rose sharply when Russia invaded Ukraine.
The 31-member nations of the International Energy Agency—which include the U.S., most of Europe, Australia, Japan, Mexico and others—are planning to announce a new reserve release totaling 120 million barrels, officials said, the largest release in the IEA’s 47-year history. Around half of that amount will come from U.S. reserves, which were included in Washington’s previously announced decision to release 180 million barrels of oil over six months. That leaves around 60 million barrels of additional oil that will hit the market because of the IEA decision, which is expected to be announced by the end of the week. Those barrels are expected to be released over six months to track the U.S. schedule, an official said. IEA nations on March 1 announced the release of 60 million barrels—including 30 million barrels from the U.S.—in what was then the agency’s biggest-ever release of reserves.
4. Manufacturers Grind to a Halt in China as Covid Lockdowns Expand — manufacturers are struggling to keep some of their China operations going as extended and widening Covid-19 lockdowns choke off supplies and clog up truck routes and ports, heaping more pressure on the stretched global supply chain. Stringent government measures to contain the country’s Covid-19 outbreak, the worst in more than two years, are locking down tens of millions of people, mostly in and around the industrial heartland of Shanghai. The curbs are keeping many workers at home, restricting output at some factories and closing others, including component makers for Apple Inc. and Tesla Inc. Tesla, which suspended work at its factory in Shanghai on March 28, still hasn’t set a date for restarting production, according to people familiar with the matter. The electric-vehicle giant said it is implementing Covid-19 control requirements and setting work arrangements according to government policies.
The week ahead — Economic data from Econoday.com:
