Tuesday, April 4, 2017

Tuesday, April 4, Night Wall Street Roundup: Wall St. Flat As Investors Await China Meeting, Earnings Season

By Sinead Carew
Reuters
April 4, 2017

U.S. stocks were little changed on Tuesday, as investors stayed on the sidelines ahead of the first-quarter earnings season and fretted about President Donald Trump's ability to deliver on tax reform and other promises.

Investors also focused on a potentially tense meeting between Trump and Chinese President Xi Jinping set for the end of the week. Retail stocks swooned after downgrades and a Ralph Lauren (RL.N) announcement it was shutting its flagship Fifth Avenue store in New York and cutting jobs.

"We're sitting on the sidelines waiting for earnings to begin in earnest next week," said Kim Forrest, senior equity research analyst, Fort Pitt Capital Group in Pittsburgh.

The Dow Jones Industrial Average .DJI rose 39.03 points, or 0.19 percent, to 20,689.24, the S&P 500 .SPX gained 1.32 points, or 0.06 percent, to 2,360.16 and the Nasdaq Composite .IXIC added 3.93 points, or 0.07 percent, to 5,898.61.

While Trump's pro-business policy promises have helped U.S. equities hit record highs since the Nov. 8 election, recent setbacks in pushing reforms through Congress have led investors to question his ability to deliver.

Even if earnings are good, Phipps said, stocks may still be overvalued without the substantial tax cuts the market has already priced in.

"The only way you can justify price earnings multiples is if you assume you get corporate tax reform," said Robert Phipps, a director at Per Stirling Capital Management in Austin, Texas.

Phipps said he will watch the Trump-Xi meeting closely for news on North Korea and China-U.S. trade relations.

"There's a lot of waiting until Friday. The payroll numbers and the meeting with China's Xi." "The elephant in the room is Washington. Right now its all about politics."

Stocks saw some support earlier in the session when Trump said U.S. infrastructure spending could top $1 trillion and said his administration was working on a major "haircut" for Dodd-Frank banking regulations.

The S&P industrial sector .SPLRCI ended up 0.2 percent while the materials sector .SPLRCM closed up 0.4 percent.

Financial investors appeared skeptical, however, as the S&P bank subsector .SPXBK ended down 0.3 percent.

Ralph Lauren shares fell 4.5 percent to $77.74. The retailer's struggles were seen as a worrying sign for a sector losing ground to online rivals. Nordstrom Inc (JWN.N) closed down 5.5 percent, while L Brands Inc (LB.N) fell 4.4 percent after a brokerage downgrade.

Airlines were weak, with American Airlines dropping 3.7 percent to $40.90 after rival Delta Airlines Inc (DAL.N) cut the forecast for a key revenue metric for the second time in less than a month. Delta shares fell 2.6 percent to $45.11.

About 6.2 billion shares changed hands on U.S. exchanges, compared with the 6.8 billion daily average for the past 20 trading days, according to Thomson Reuters data.

The S&P 500 posted 12 new 52-week highs and seven new lows; the Nasdaq Composite recorded 38 new highs and 48 new lows.


Article Link To Reuters:

Half Of American Families Are Desperately Living Paycheck To Paycheck

Recession-era debt and stagnant wages are a bad combination.


MarketWatch
April 4, 2017

More than seven years after the Great Recession officially ended, there is yet more depressing research that at least half of Americans are vulnerable to financial disaster.

Some 50% of people is woefully unprepared for a financial emergency, new research finds. Nearly 1 in 5 (19%) Americans have nothing set aside to cover an unexpected emergency, while nearly 1 in 3 (31%) Americans don’t have at least $500 set aside to cover an unexpected emergency expense, according to a survey released Tuesday by HomeServe USA, a home repair service. A separate survey released Monday by insurance company MetLife found that 49% of employees are “concerned, anxious or fearful about their current financial well-being.”

One explanation: Americans are crippled under the same amount of debt as they had during the recession. The New York Federal Reserve on Monday predicted that total household debt will reach its previous peak of $12.68 trillion in 2017. The last time it reached that level was in the third quarter of 2008, during the depths of the Great Recession. Indeed, it’s already close: Total household debt in the fourth quarter of 2016 was $12.58 trillion. Fewer borrowers have housing-related debt in 2017 and, instead, have taken on auto and student loans.

One illness can push people to the brink of financial ruin. Wanda Battle, a registered nurse for four decades, was recently hit with a $100,000 medical bill. She has visited her local emergency room on more than one occasion due to severe migraines and mini-strokes. Battle, who is based near Nashville, Tenn., managed to reduce her latest hospital bill to $32,000 based on her relatively low income, but still faces $650 monthly payments for a previous $22,000 medical bill. “There were times I couldn’t work,” she told MarketWatch. “I have not held a job that is continuous.”



“A key consideration regarding household finances and overall economic well-being is the ability to withstand financial disruptions, according to a separate 2016 report released by the U.S. Federal Reserve, which surveyed nearly 9,000 adults. Many individuals who experienced a financial hardship in the prior year indicated that they drew down savings, undertook some form of borrowing, or both. Some 20.5% of those who reported a financial hardship and earn less than $40,000 per year did just that. (The percentage was 11% for those earning between $40,000 and $100,000.)

Not everyone is vulnerable to an unexpected medical bill or layoff. Over a quarter of Americans in the HomeServe USA survey said they had $8,000 or more set aside for unexpected emergency expenses, and respondents aged 65 and over are likely to have the most money set aside for unplanned expenses, with nearly half (48%) of Americans within the age group reporting having $8,000 or more in emergency funds (versus just 20% of those aged 18 to 64). Around half of those surveyed said they most expected a big medical or car expense within the next 12 months.

On the upside, President Trump inherited an economy that is far healthier in many respects than the one his predecessor inherited in 2008. The unemployment rate when President Obama took office, in January 2009, was 7.8% compared to 4.8% in January 2017, MarketWatch reported. What’s more, the U.S. lost 793,000 jobs during the month Obama was sworn into office, while it gained 227,000 positions in January when Trump took office, and the U.S. economy created 235,000 new jobs in February in the first full month of the Trump White House.


Article Link To MarketWatch:

Fed's Lacker Leaves Central Bank Over Leak Of Market-Sensitive News

By Jason Lange and Howard Schneider
Reuters
April 4, 2017

Richmond Federal Reserve President Jeffrey Lacker abruptly left the U.S. central bank on Tuesday after admitting that a conversation he had with a Wall Street analyst in 2012 may have disclosed confidential information about Fed policy options.

The 2012 leak had triggered a criminal investigation after research firm Medley Global Advisors told its clients the details of a key Fed meeting a day before the Fed released its own record of the discussion.

At the Fed's September 2012 policy meeting, officials laid the groundwork for the massive bond-buying stimulus they were to roll out later that year. Early knowledge of that discussion could have given some traders an unfair edge.

Lacker who had previously announced he would retire in October, on Tuesday said he decided to make his departure effective immediately because of his role in the leak.

It was not clear if Lacker was pushed out of his post. The Richmond Fed said in a statement that it took "appropriate actions" after learning the outcome of government investigations into the leak.

Lacker's lawyer said he would not be facing charges. The Fed's inspector general, Mark Bialek, said in a separate statement that he was closing an investigation into the leak.

"I crossed the line," Lacker said in a statement, saying he never intended "to reveal confidential information" and that he may have broken rules against giving people an edge in business.

Lacker admitted to talking to an analyst from Medley in October 2012, but did not say he provided her with details about the Fed's policy options, which aimed to boost the economy following the 2007-09 financial crisis.

Lacker said it was the Medley analyst who brought up confidential Fed information.

"I should have declined to comment and perhaps have ended the phone call. Instead, I did not refuse or express my inability to comment and the interview continued," Lacker said.

In addition, Lacker said he had not fully disclosed details about his discussion with the Medley analyst when he was interviewed by a Fed lawyer later in 2012. But he said he did disclose further details in a 2015 interview with the Federal Bureau of Investigation.

Lacker gave no reason for the time gap between the 2015 interview and his statement on Tuesday.

The Medley report triggered furor in the U.S. Congress and became a source of friction between the Fed and lawmakers, leading to a criminal investigation.

"This development could hurt the Fed politically," said Roberto Perli, an economist at Cornerstone Macro.

In May 2015, the chair of the House of Representatives Financial Services Committee, Jeb Hensarling, a Texas Republican who has called for stricter Congressional oversight of the central bank, subpoenaed Fed documents and communications related to the leak.

Criminal Inquiry

Lacker, one of the U.S. central bank's most reliable proponents of interest rate increases, had led the Richmond Fed since 2004.

During his tenure, he became known for his dissenting votes on policy. He voted against several Fed policy decisions in 2006 because he favored interest rate increases, while in 2009 he opposed Fed purchases of mortgage-backed securities, which were part of its bond-buying stimulus program.

Days before his conversation with the Medley analyst, Lacker voted against increasing asset purchases at the Fed's September 2012 meeting.

Lacker said his interview in 2015 with the FBI also involved the United States Attorney’s Office for the Southern District of New York, the Office of the Inspector General of the Federal Reserve Board and the U.S. Commodity Futures Trading Commission.

The Richmond Fed is one of 12 regional reserve banks that are part of the U.S. central bank. They process payments and help regulate banks, while their presidents take turns as members of the Fed committee that sets interest rates.


Article Link To Reuters:

H-1B Visa Overhaul Could Actually Benefit Big Tech Companies

By Joshua Brustein and Jing Cao
Bloomberg
April 4, 2017

The new way foreign worker visas are doled out in the U.S. is poised to benefit some of the biggest technology companies, like Alphabet Inc., Microsoft Corp. and Facebook Inc., while punishing outsourcing firms that developed a disproportionate dependence on the program.

The administration is increasing scrutiny on H-1B visa applications for low-level computer programmers, focusing enforcement on the heaviest users of the program, and warning applicants not to discriminate against American workers. The size and scope of the program remains unchanged for now.

There are 85,000 H-1B visas distributed through a random lottery each year, and applicants rush to file by the start of the process, this year on April 3. Outsourcing firms often recruit lower-skilled workers through the program, so they may not get as many visas under the new rules. That means more for everyone else, including U.S. tech giants. What some see as a crackdown may actually be a boon for these companies, according to Rod Bourgeois, head of research at DeepDive Equity Research. "If Indian firms have a harder time getting basic programming jobs approved for the visa process, then the firms truly hiring people with high skills and specialized knowledge will benefit,” he said.

Alphabet Inc.'s Google told some of its workers on Monday not to worry about the changes, saying its software engineering roles don't fall into the job categories included in the administration's new guidance. Other big U.S. technology companies didn't say anything publicly. That's tantamount to a round of applause compared with the industry's reaction to Trump's executive orders restricting immigration from a handful of Muslim-majority countries. Dozens of companies supported lawsuits against the orders. When the first one was issued in late January, Google told some staff to return to the U.S. in case they couldn't get back in later, and thousands of employees protested.

Carl Shusterman, a former attorney for the U.S. Immigration and Naturalization Service, called the H-1B changes "a subtle threat" against outsourcing companies.

Seven companies had more than 1,000 visa applications for the lowest-level computer programmers certified by the Department of Labor in 2015, the last year for which numbers are available. All of them provide outsourcing services, such as IT, HR, payroll and accounting, for other companies. One of them -- HCL America Inc. -- is headquartered in the U.S., with most of the rest based in India.

"The top 15 job shops are all pretty much all from India. They get 85 percent of the H-1Bs. If they cut that number, then the American firms will get the bigger slice of the pie," Shusterman said. "A lot of the Apples or Googles are paying over $100,000 a year. They're going after top talent. This memo is really going after the lowest paid people."

The American technology industry is happy to go along with the framing of H-1B reform as a matter of cutting down on bad actors. “If you’re taking that out of the system you’re able to take the program back to its true stated purpose,” said Michael Hayes, government affairs manager for the Consumer Technology Association, in February. “Removing the abuse lets you see what the future needs of the system are.” He declined to comment on the recent changes.

Silicon Valley companies say they use H-1B visas differently than outsourcing firms. Their common refrain is that its bad policy to let foreign students earn advanced degrees from the best U.S. universities, then send them away to work in other countries. But that’s not the main use of the program. Ron Hira, who studies immigration policy at Howard University, shared analysis with Congress last year that looked at the H-1B program from 2005 to 2012. Only two of the top twenty H-1B recipients over that time used more than 10 percent of their visas to employ people who held Ph.Ds. About one-third of Intel Corp.’s H-1B workers held doctorate degrees, while Google was second with 12 percent. A majority of H-1B workers employed by Apple, Microsoft and IBM didn’t hold higher than a bachelor's degree.

The administration or Congress may yet find a way to make more sweeping changes to the H-1B program that would disrupt how the largest U.S technology companies use the program. There are a handful of members of Congress vying to alter the H-1B program. But because the visas are handed out once a year through the lottery system, the time for such action has passed in 2017.

Like the big U.S. tech companies, most industry policy experts kept quiet on this week’s changes. They’re keeping their powder dry ahead of any bigger changes before the visa rush next spring.


Article Link To Bloomberg:

The New Party Of 'No'

By Megan McArdle
The Bloomberg View
April 4, 2017

Ah, the joys of doing nothing. Republicans must remember them fondly, as they struggle with the difficulties of actually designing real-world bills that have to get past the Senate, and y’know, not hideously offend large numbers of voters.

Democrats, meanwhile, are discovering the sweet, toddler-like joys of just saying “no” to everything. Help Republicans repeal Obamacare? Heck no. Quietly stand by while Republicans approve an eminently qualified nominee to the Supreme Court? No, no, no!

After years of failing at the grown-up business of passing legislation, small wonder the Democrats would like to let the Republicans have a try at being the adults in the room. In politics, saying "no" is a great deal of fun.

Besides, that’s where the electorate seems to be right now. Right after the election, when I was on vacation in Asia, I predicted on Facebook that we’d see Democrats investing in increasingly counterproductive obstructionism, simply because that was what the base was going to want:

Liberals have been very fond of arguing that [conservative] elites somehow encouraged the growth of these destabilizing influences by not shutting down ... well, name your candidate: right-wing talk radio, the tea party, obstructionist forces in Congress, Donald Trump. Liberals are about to find out what those Republicans have long known: they had no power to shut them down. All the tools they might have used had been taken away decades ago, mostly by progressives.

For exactly the same structural forces are at work on the left. Things fall apart; the center cannot hold. Those forces have been masked by Democratic possession of the presidency, which is a unifying force far out of proportion to its actual usefulness. As long as your party holds the White House, you feel like you have a shot at getting things done, and you are willing to cut a great deal of slack to your leadership. Prepare to see Republicans get a lot quieter and more cooperative, and the obstreperous forces on the left to get angrier and more intransigent.


So far this prediction has pretty much been borne out. The base wants a filibuster of Neil Gorsuch's nomination to the Supreme Court, even though there is literally no possible tangible end that can be achieved thereby -- and even though it may indeed make it harder to block Trump nominees in the future. For instance some future truly awful Supreme Court nominee, one for whom Republicans wouldn’t be willing to rewrite Senate rules in order to overcome a filibuster threat.

At the moment, of course, the empty gesture of blocking Gorsuch is delighting many on the left, who finally feel like their party has grown a spine. If this follows the pattern that evolved on the right, however, that feeling will turn out to be increasingly costly. With the Tea Party, Republican moderates initially imagined that they had found something like the crazy partner in a cop buddy film -- the one who could be used to threaten suspects into acting against their own self-interest by saying: “Look, he’s crazy. He could do anything, and I just don’t know how long I can hold him back!”

But then the mainstream lawmakers discovered that their partner's craziness wasn’t an act. The Tea Party helped them secure some victories, yes. But then Crazy Mac cost them control of the Senate, engaged in grandstanding ploys with no obvious payoff, and took the focus off of Obamacare at its moment of greatest vulnerability. They had no control over their crazy “partner,” and that partner cost them more potential victories than it delivered.

Democrats may end up experiencing the same thing. Democrats desperately need to become competitive again outside of a handful of urban agglomerations, not just because their rural failures cost them the presidency, but also because of all the other offices they’ve lost at every level of government below the White House. But making themselves more competitive is probably going to require backing away from an immigration position that was skirting dangerously close to “open borders,” and placing less focus on identity politics. If they try to do this, their base will (correctly) perceive themselves losing power and status in the party, and they will be incandescent. Their first priority will be extracting signals of loyalty to themselves, not winning elections … and if the Republican experience is any guide, they may well get what they want.


Article Link To The Bloomberg View:

Tuesday, April 4, Morning Global Market Roundup: Europe Stocks Rise But Bond Yield Falls Show Investor Caution

By Nigel Stephenson 
Reuters
April 4, 2017

European shares rose on Tuesday, shrugging off falls on Asian bourses, but low-risk government debt yields fell as investors fretted about a meeting between the U.S. and Chinese presidents and Donald Trump's ability to deliver economic stimulus.

The dollar edged up against a basket of major currencies but lost ground against the safe-haven Japanese yen. Gold, another asset sought in uncertain times, also rose.

In emerging markets, the South African rand fell more than 1 percent against the dollar and bank shares fell after S&P Global cut its credit rating to junk on Monday.

The pan-European STOXX 600 share index edged up 0.1 percent, after falling from a 16-month high on Monday.

Britain's FTSE 100 index rose 0.5 percent.

Shares have hit record highs across the globe in recent months, partly in anticipation of Trump cutting taxes, easing regulation and raising infrastructure spending.

However, Trump's struggles to push other legislation through Congress has led some to question whether he will be able to fully make good on his campaign pledges.

Data on Monday showing U.S. car sales lagged market, which helped push Wall Street lower, and geopolitics, including the Russian metro blast and Trump comments on North Korea, also weighed on markets.

Automaker stocks were the main drag on Tokyo shares on Tuesday; the Nikkei fell 0.9 percent to a 10-week low, also hit by the impact of the strong yen on exporters.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.3 percent, having hit a 21-month high last week.

Yields on low risk U.S. and German government bonds fell. falls. Benchmark 10-year U.S. Treasury yields were down 2 basis points at 2.33 percent after falling as low as 2.31 percent, its lowest in more than a month, in Asian trade.

German 10-year yields touched their lowest level since March 1 and last stood at 0.26 percent, down 1.6 bps.

Italy's bonds outperformed the rest of the euro zone on the prospect of help for two struggling Italian lenders.

Yields on the bonds of Banca Popolare di Vincenza and Veneto Banca fell sharply after a European Commission spokesperson said late on Monday said there could be a solution on a bailout.

Italian 10-year government bond yields fell 2.7 bps to 2.3 percent.

"Italy's banking sector has been a never-ending story, so any news pointing towards state support reduces the risk of a more severe development that could be the beginning of a banking crisis," said DZ Bank strategist Daniel Lenz.

The dollar inched up 0.1 percent against its currency basket but fell 0.4 percent to 110.44 yen, off a low for the day of 110.32 yen.

"(The yen buying) is based on broad-based risk-off since yesterday. There was a tragedy in Russia and there may be some hedging-type buying ahead of the French presidential debate and also French elections in three weeks," said Yujiro Gato, currency analyst with Nomura in London.
The euro fell 0.2 percent to $1.0652 and sterling fell 0.5 percent to $1.2428.

The Australian dollar was 0.6 percent weaker at $0.7555 after the central bank held rates steady at a record low 1.5 percent as expected, and said growth in household borrowing, largely for housing, was outpacing rises in household income.

South Africa's rand fell as much as 1.9 percent before recovering to trade down 1.1 percent at 13.83 per dollar while bank shares tumbled after the credit rating cut in response to President Jacob Zuma's dismissal of his finance minister, Pravin Gordhan, last week.

Yields on South African dollar-denominated government bonds rose, with the 10-year benchmark yielding nearly 5 percent.

Gold hit a one-week high around $1,260 an ounce.

Oil prices fell, hit by a rebound in Libyan crude production and an increase in U.S. drilling. Brent crude fell 21 cents a barrel to $52.92.


Article Link To Reuters:

U.S. Car Demand Collapses In Threat To Trump's Factory Push

Swerve in consumer taste changes equation for the industry; ‘You’re not going to see’ new U.S. car plants, consultant says.


By David Welch and Jamie Butters
Bloomberg
April 4, 2017

Ford Fusion: down 37 percent. Chevrolet Malibu: down 36 percent. Toyota Prius: down 29 percent.

As those grim numbers suggest, the U.S. auto industry was blindsided last month by just how fast sedans have fallen out of favor with Americans now embracing roomier sport utility vehicles. Family-friendly crossovers may be more profitable, but the quick shift is causing headaches.

The swerve in consumer taste is just one of the forces -- along with slumping used-car values and a pullback in subprime auto lending -- that are changing the equation for manufacturers as President Donald Trump leans on the industry to build new plants and boost hiring. That’ll be hard to pull off: A glut of both new and used vehicles on the market has sparked an incentives battle, meaning new production lines are the last thing the companies need.

Industrywide deliveries in March were supposed to show a rebound following small dips in January and February. But the annualized sales pace, adjusted for seasonal trends, slowed to 16.6 million vehicles, from 16.7 million a year earlier, according to researcher Autodata Corp. Analysts had projected the rate would accelerate to about 17.2 million.

Automakers set a record in the U.S. last year, with 17.6 million vehicles sold.

“I’ve been expecting a slowdown for a while,” said Morningstar Inc. analyst David Whiston. “It shouldn’t be a surprise. Once you hit peak sales, it seems like you only have bad news ahead.”



Ample discounts have failed to spur demand for models like General Motors Co.’s Chevrolet Malibu and Ford Motor Co.’s Fusion, which are being surpassed by crossovers as the new American family vehicle of choice. The Toyota Prius sedan model continued its slump despite a thorough makeover in late 2015 that improved the staid hybrid’s ride.

Crossover Sales

In March, sales of crossovers including the Chevrolet Equinox and Ford Escape were up 11 percent, while mid-size cars like the Fusion fell 16 percent, according to Woodcliff Lake, New Jersey-based Autodata.

SUVs are keeping profits afloat. Cheap gasoline and more efficient engines are allowing buyers to get into the bigger people-movers they love. With an average sticker price of more than $38,000, a truck or SUV costs about $10,000 more than the average car. The incentives needed to sell them amount to an 8.8 percent discount, compared with 11 percent for cars, according to Edmunds.com, an industry research firm.

The problem is that even popular SUVs need more and more incentives to keep sales moving.

Share Declines


While the pace of overall auto sales is plenty for companies to make money, investors aren’t buying. The March figures hit carmakers hard with GM falling 3.4 percent and Ford declining 1.7 percent on Monday. AutoNation Inc., the nation’s largest car dealer, dropped 3.4 percent.

Volkswagen AG declined 0.8 percent in Frankfurt at 9:20 a.m. while Fiat Chrysler Automobiles NV was little changed in Milan. Toyota Motor Corp. closed Tokyo trading 1 percent lower.

The one U.S. automaker to see its shares rise was Tesla Inc., whose upcoming mass-market Model 3 sedan gives the company a shot a real growth. The electric-car maker’s market capitalization surged past Ford for the first time.

For the auto industry’s incumbents, inventories are high and incentives are at near-record levels. That’s prompting companies to spend more on discounts just to stay close to 2016’s record results. Jessica Caldwell, an analyst with Edmunds.com, said odds are slim the U.S. market finishes at last year’s level, particularly as interest rates start to rise and leasing growth stalls.

“Last year, it seemed like ‘Oh, there’s still probably room for it to grow, all the other metrics look good,”’ Caldwell said. “But this month it seems like things are pointing to a slowdown.”

No New Plants

While industry sales probably won’t fall by much -- they’re down 1.5 percent through March -- profits could slip as automakers cut production. Trump will have a hard time getting the new investment he’s been demanding, even with consumer confidence strong and unemployment low.

“You’re not going to see the U.S. get new plants,” Mark Wakefield, who heads the automotive practice for consulting firm Alix Partners, said by phone. “The market went from pull to push nine months ago. We don’t see it going upward from here.”

GM has already made cuts since late last year at passenger car plants in Michigan and Ohio, laying off more than 3,000 workers who build Chevy Cruze compacts and Impala sedans. Ford in January canceled plans to build a $1.6 billion factory in Mexico, after deciding it didn’t need to boost output of Focus compacts.

Wakefield projects sales will slip by about 300,000 units this year, as a typical cyclical decline of 15 percent to 20 percent begins.

“When it drops, it drops sharply,” he said. “It doesn’t fade down.”


Article Link To Bloomberg:

It's A Big Week For One Of The Most Important Debates In Markets

Reports culminate in March employment figures, due out Friday; Underlying health may be somewhere between hard, soft data.


By Patricia Laya
Bloomberg
April 4, 2017

The world will have a better idea by the end of this week, but probably no definitive answer, on whether the U.S. economy’s boom in “soft” data is being reflected in the “hard” stuff.

This week’s economic data include trade figures and factory orders, culminating in a payrolls report Friday forecast to show 175,000 jobs added by U.S. employers in March. An Institute for Supply Management survey on Monday indicated manufacturers continued to expand at a robust pace in March. That followed Friday’s tepid figures on February consumer spending, suggesting that the largest part of the economy could limit broader expansion, at least in the first quarter.

The gap between soft data on confidence and other surveys that capture the optimism of the moment and expectations for policy, and hard data such as consumer spending that show actual performance, has been a hallmark of the economy this year. Figuring out which set is a better predictor of the economy in the coming months is critically important to the decisions companies and investors make this year.

“The jury is still going to be out,” said Ryan Sweet, an economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. “The underlying health of the economy is somewhere between the hard and the survey data. I don’t think it’s doing as poorly as first-quarter GDP will likely show, and I don’t think it’s a strong as the surveys suggest.”



The Federal Reserve Bank of New York, which incorporates so-called “soft” data such as surveys of consumers and factory purchasing managers into its tracking of economic growth, estimates first-quarter expansion of 2.9 percent. The Atlanta Fed, focused strictly on “hard” data including actual spending and trade that are used in a traditional calculation of gross domestic product, comes up with a figure of 1.2 percent. Those compare with a median estimate of 1.8 percent from analysts surveyed by Bloomberg.

Recent economic sentiment surveys show business leaders, manufacturers and Americans are very optimistic about the future, which explains the New York Fed’s much rosier forecast. Many of the hard numbers have been tepid or solid -- but not stellar.

Another piece of “hard” data was released Monday: U.S. construction spending rose less than estimated in February, with a 0.8 percent increase, compared with analysts’ estimate of 1 percent. Other “soft” data due this week include a non-manufacturing gauge from ISM for March and the weekly Bloomberg Consumer Comfort Index.

Consumer Confidence


Last week, the Conference Board said its index on consumer confidence rose to a 16-year high in March, posting an increase that exceeded the expectations of all economists in the Bloomberg survey. While the sharp rise in sentiment has coincided with a period of rising stock prices and a firming of the labor market, it’s also been tied to expectations of growth-boosting policies, such as tax cuts.

The February report on personal spending showed a rise of just 0.1 percent in February after a 0.2 percent gain a month earlier. But the disappointing start to the year for Americans’ spending probably won’t be the story for the rest of 2017 as faster income growth, higher confidence and a robust labor market support a rebound.

“Each piece of data gives you a little bit more information,” said Jesse Edgerton, an economist at JPMorgan Chase & Co. in New York. But “there’s not much sign of them converging so far.”


Article Link To Bloomberg:

Why The Rise Of Autonomous Machines Could Help Workers

By Xenia Tan and Gwyn Heidi Ng
CNBC
April 4, 2017

Singaporean autonomous technology firm SESTO Robotics is stepping up its game as it launches the latest model of its Automated Guide Vehicles (AGVs).

Called the SESTO 300, the AGVs are customized mobile robots created specifically for the manufacturing industry to fulfill logistical roles. The company, which was spun-off earlier this year as a wholly-owned subsidiary of Singaporean engineering firm HOPE Technik, announced the new product Tuesday at the Manufacturing Technology Asia conference.

SESTO Robotics CEO and co-founder of HOPE Technik, Michael Leong, told CNBC's "Squawk Box" that automation "is a direction that [Singapore] is moving along as the population gets more well-educated."

Increasing Productivity

According to Leong, the average company could stand to boost efficiency by shifting toward automation and robotics.

Manpower productivity improvements "can range from 30 percent to 200 percent," said Leong.

A tracking function embedded in the AGVs also "resolves or eliminates the chances of things" that have been "moved wrongly and inserted into the wrong station."

Companies have saved "millions of dollars" as a result, said Leong.

Job Transformation

Contrary to the rhetoric of robots stealing jobs, Leong said he believes robotics will "transform jobs," especially in "high-growth-stage countries" where the population will no longer be satisfied with simple menial jobs.

"So imagine what used to be a job pushing the trolley is now changed to a robotic technician or robotic engineer to make sure these AGVs are well-managed and well-serviced," Leong said.

What Is Industry 4.0?


"This is really an exciting time for Industry 4.0 to happen," Leong said.

Beyond the automation of single machines and processes, Industry 4.0 (also known as the fourth wave of industrialization) is the Internet of Things that digitizes and integrates complete chain processes, and grants autonomy to robotics.

"We are able to connect the digital world now better with the robotics world... in the past, where you have automation running by [itself], [the robotics] are not really plugged into your back-end software, your tracking systems."

"But now everything can be plugged in and gelled together," Leong said, citing the integration capabilities of SESTO Robotics' AGVs.

Future Plans


SESTO Robotics is exploring the possibility of attaching "robotic arms to the AGVs" and how it could advance its automating potential in assembly and manufacturing lines. Leong also said the company plans to open two new offices in Asia, and could possibly set up in the U.S. this year.


Article Link To CNBC:

How Upgrading Humans Will Become The Next Billion-Dollar Industry

Fifty years from now, today’s humans will be obsolete, historian Yuval Harari says.


By Jeremy Olshan
MarketWatch
April 4, 2017

Investors searching for the next transformative technology destined to turn a bunch of Ivy League dropouts into billionaires, and half the market into a loose slot machine, need only look in the mirror.

“The greatest industry of the 21st century will probably be to upgrade human beings,” historian Yuval Harari, author of the fascinating new book “Homo Deus,” told MarketWatch.

‘For the first time in history it will be possible to translate economic inequality into biological inequality.’

For all of humanity’s scientific, economic and artistic achievements, we have neglected this ultimate self-improvement project, Harari said. Our bodies and brains, after all, still run on the same hardware and software that evolved some 200,000 years ago.

Alphabet’s GOOG, -0.07% GOOGL, +1.06% Google already has a unit devoted to overcoming death, Harari noted. And who can doubt that Apple AAPL, -0.08% will want to pick from this new tree of knowledge, as well, or that after conquering self-driving cars Uber, in spite of the antics of its CEO, will want to build an √úbermensch?

As new technologies yield humans with much longer battery lives, killer apps and godlike superpowers, within the next six decades, if Harari is right, even the finest human specimens of 2017 will in hindsight seem like flip phones.

There is, of course, a catch. Many of us will remain flip phones, as the technology to upgrade humans to iPhones is likely to be costly, and regulated differently around the world. These advances will likely “lead to greater income inequality than ever before,” Harari said. “For the first time in history it will be possible to translate economic inequality into biological inequality.”

Such a divide could give rise to a new version of “old racist ideologies that some races are naturally superior to others,” Harari said. “Except this time the biological differences will be real, something that is engineered and manufactured.”

At the same time, these superhumans will have less and less to do, Harari, said, because robots and artificial intelligence will perform more and more of the jobs with which obsolete humans used to be tasked.

So what will these future humans do all day? Will we sail aboard an intergalactic cruise ship sitting on our butts while sucking down junk food like the future humans in Pixar’s DIS, -0.17% feel-good dystopian movie “Wall-E”?

Almost, Harari said.

“The only serious answer I can give is they will play computer games,” Harari said. “Immersive, 3D virtual-reality games that will be far more fun and more exciting than anything in real life.”

If that sounds straight out of an episode of “Black Mirror,” Harari noted that we have been playing variants on such games for thousands of years. “This is actually not completely new — religion is in a sense a virtual-reality game. There are a set of quite arbitrary laws, you have to gain points, and if you gain enough points in this life you get to go on to the next level.”

Given that choice, it may be preferable to remain a flip phone in a dad bod case.


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How The Pending Aramco IPO Could Cause A Surge In Oil Prices

The Saudi energy company and its underwriters, aiming for the largest IPO in history, will ensure oil prices rise before the offering.


By Thomas H. Kee Jr.
MarketWatch
April 4, 2017

The Saudi energy company and its underwriters, aiming for the largest IPO in history, will ensure oil prices rise before the offering

The all-star underwriting team to the Saudi Aramco IPO will lead to a barrage of institutional support. And that could lead to higher oil prices. Investors, take note.

J.P. Morgan JPM, -1.09% Morgan Stanley MS, -0.30% and HSBC HSBC, -0.64% are the lead underwriters. But investment banks from all over the world will be clamoring to get a piece of what is expected to be the biggest initial public offering in history, expected some time next year. A Saudi official estimated the company is valued at more than $2 trillion, though the stake being offered in Saudi Arabian Oil Co., known as Saudi Aramco, is much smaller. Underwriting the IPO gives the underwriters control — and in a position to make the most money.

Ultimately, this is what it comes down to — money — and my experience suggests that in the investment-banking world, this is always true. In fact, investment bankers are typically described as money hungry and greedy. In most cases, the company going public doesn’t mind at all.

Biggest IPO In History

After all, the company going public, in this case Aramco, wants the best price possible too, and Saudi Arabia also wants the icing on the cake, which would be to have the IPO of their oil assets be the biggest IPO in history. As a result, there is an incentive both by Aramco (Saudi Arabia) and the underwriters, which have now been officially announced, to get the best price possible.

Oil prices CLK7, -0.58% today are trading at around $50 per barrel, down from almost $100 in mid-2014. That’s because OPEC nations boosted production to lower prices in an effort to damage U.S. shale companies. But that would have to end if Aramco wants a whopper of an IPO. OPEC more recently agreed to cut production to bolster prices.

IPO Price Tied To Oil Prices


Sometimes underwriting an IPO and pitching it to investors can be complicated, but in this case a relationship is relatively easy to identify. The value of the assets is directly tied to the price of oil. The higher the oil price, the higher the price of the IPO. But the opposite also holds true. If oil prices are low, the IPO will be priced lower as well, so the determining factor is obvious. There were only two energy IPOs in 2016.

This is where the institutional support can really make a difference. The underwriters that are appointed to take this deal public and advise on the finances of the deal are in a position to profit most. They largely control the international distribution of shares among other investment banks, and as a result can now comfortably set a clear precedent.

The investment-banking community is relatively small, although it’s capable of bringing massive deals to market. And within this rarefied group are unwritten agreements.

Unwritten Rules

In fact, when I was working at Morgan Stanley, I knew of a policy directed at individual investors. Those who wanted to get shares of the good IPOs needed to be willing to take shares of the ones that were not so good as well. It wasn’t part of an official agreement, but everyone knew that allocations of IPOs that were more likely to open significantly higher than where they were priced, which would make an investor big money right off the bat, were not made to investors who did not consistently participate in other investment-banking deals.

Because the relationship between oil prices and the price of this upcoming IPO are so closely correlated, and because investment banks often have divisions that make this possible, we expect the investment banks that are directly participating in this IPO to be bullish on oil prices. And we expect an unwritten rule to exist too.

In other words, the investment banks that are not direct underwriters will be encouraged to support oil prices as well. I don’t, of course, expect this to be part of any contract. But given the direct relationship of oil to the pricing of this IPO and the influence institutional firms have over oil prices, it is clear to me that incentive will be there for any investment bank who wants a piece of the deal to support oil prices at the institutional level from this point forward and until the IPO comes to market.


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Oil Prices Fall As Libya's Output Rebound Boosts Supply

By Christopher Johnson 
Reuters
April 4, 2017

Oil prices fell on Tuesday as a rebound in Libyan crude production combined with an increase in U.S. drilling to signal the potential for increased supply.

Benchmark Brent crude oil LCOc1 was down 20 cents at $52.92 a barrel. U.S. light crude oil CLc1 was 20 cents lower at $50.04 a barrel.

Both benchmarks recovered from four-month lows last week on expectations that the Organization of the Petroleum Exporting Countries would manage to tighten supply by cutting production under a deal agreed at the end of last year.

But global inventories remain stubbornly high and many investors are betting that it will take many months for oil prices to respond convincingly to lower OPEC output.

"Crude oil prices fell as increased drilling in the United States and a rebound in Libyan output weighed on investor sentiment," ANZ bank analysts said in a note to clients.

Libya's crude output increased after state-owned National Oil Corp (NOC) lifted a force majeure on loadings of Sharara oil from the Zawiya terminal in the west of the country, sources familiar with the matter told Reuters.

U.S. drillers last week added rigs for an 11th week in a row, data from energy services company Baker Hughes showed on Friday, extending a 10-month drilling recovery.

U.S. light crude may drop to $49.62 a barrel as it failed to break resistance at $50.95, said Reuters commodities markets technical analyst Wang Tao. Brent crude may retrace back to $52.79 per barrel, he said.

UBS analyst Giovanni Staunovo said OPEC was taking longer than expected to tighten the oil market but recent data suggested the process was under way in earnest.

"We believe the implemented production cuts will trigger a material drawdown in OECD oil inventories and thus higher crude oil prices," Staunovo said. "We expect Brent oil prices to rise above $60 a barrel in three months."


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What's Really Driving The Trade Deficit With China

By Michael Pettis
The Bloomberg View
April 4, 2017

U.S. President Donald Trump has warned that discussions with his Chinese counterpart Xi Jinping in Florida this week will be "very difficult," in large part because of disagreements over trade. But before Trump can shrink America's lopsided trade deficits -- with China or anyone else -- he first must recognize what's driving them.

Unlike in the past, most deficits today have little to do with currency manipulation or unfair tariffs. In the 19th century, import tariffs were the main instrument of trade intervention, increasingly supplemented during the 1920s and 1930s by currency machinations. This continued well into the 20th century. Even as international agreements -- usually championed by the U.S. -- began to restrict the use of tariffs in the post-Bretton-Woods era, Europe and Japan, taking advantage of Cold War exigencies, protected domestic industries for decades by keeping their currencies undervalued relative to the dollar.

During this time trade imbalances were mostly determined by direct differences in the cost of traded goods, while capital flowed from one country to another mainly to balance trade flows. Today, however, conditions have changed dramatically. Capital flows dwarf trade flows, and investment decisions by fund managers determine their direction and size.

This has profound implications for trade. Large, persistent trade surpluses such as the one China runs with the U.S. are no longer the consequence of explicitly mercantilist measures. Instead, they're driven by policies that distort domestic savings rates by subsidizing production at the expense of households.

Take Germany, for example. After a decade of trade deficits and high unemployment, worried leaders in Berlin implemented labor reforms in 2003-05 whose main effect was to weaken wage growth. As unemployment dropped and business profits surged, the reforms also shrunk the share of national income allocated to ordinary households, driving down the consumption share as well.

German businesses, blessed with higher profits, responded unhelpfully. They paid down debt instead of investing the profits, increasing the share of national income devoted to savings. As the growing gap between German savings and investment soon became among the largest in history, so did the German trade surplus. German banks exported the excess savings into other European countries, no longer protected by the interest-rate and currency adjustments proscribed under the rules of the euro. By 2009, after insolvency prevented one European country after another from absorbing any more of the German tsunami of capital outflows, these shifted to countries outside Europe.

While the experiences of China and Japan may seem different on the surface, they were broadly similar in impact. China, for example, severely repressed interest rates in order to boost growth. This simultaneously reduced the household share of Chinese GDP to among the lowest ever recorded and raised Chinese savings to among the highest -- so high that, even with the fastest-rising investment in the world, China still needed large trade surpluses to make up for weak domestic demand.

What happens next is the most confusing part for economists who don’t understand how trade has changed. When new capital pours into advanced economies that have always had easy access to investment -- such as the U.S. and southern Europe -- it doesn't boost investment further. Instead it automatically causes savings to contract.

There are many ways this can happen. Capital inflows might raise the real exchange rate, which reduces savings by increasing household purchasing power. Inflows can also lower interest rates and weaken credit standards, both of which encourage high-flying households to fund consumption binges. They can set off wealth effects, as foreign money pours into real estate and leaves households suddenly feeling richer. They can raise unemployment, forcing workers to dig into savings.

These automatic adjustments, and many others, force down savings rates in the capital-receiving countries. With its deep and flexible capital markets and dominant reserve currency status, the U.S. is especially vulnerable. It is the only country able to absorb large amounts of foreign capital, currently taking in nearly half of the world’s excess savings.

As counterintuitive as it may seem, if Trump wants to address the U.S. trade deficit with China, he must focus on the capital account, not the trade account. Instead of imposing tariffs, he should either implement policies that absorb foreign savings more productively into the U.S., say by exploiting historically low interest rates and investing in much-needed infrastructure whose economic benefits are too diffuse to be captured by the private sector. Or his administration should change the way savings imbalances are transmitted into the U.S., for example by taxing capital flows, which the U.S. was doing as recently as the 1960s.

What Trump shouldn't do is get involved in a tit-for-tat tariff war with China that sidesteps the real sources of the imbalances. In a world in which capital flows overwhelm trade flows, trade imbalances are driven by imbalances in global savings, and the U.S. cannot resolve the former without addressing the latter. Nothing he and Xi discuss this week will change that fact.


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Trump, Xi Will Be 'Odd Couple' At First Summit

By David Brunnstrom, Matt Spetalnick and Ben Blanchard 
Reuters
April 4, 2017

When U.S. President Donald Trump meets Chinese President Xi Jinping this week, their summit will be marked not only by deep policy divisions but a clash of personalities between America’s brash “tweeter-in-chief” and Beijing’s cautious, calculating leader.

They may have one thing in common: their rhetoric about restoring their nations to greatness. But the two men differ in almost every other respect, from their political styles to their diplomatic experience, adding uncertainty to what has been called the world’s most important bilateral relationship.

Five months after his election on a stridently anti-China platform, Trump appears to have set himself on a course for collision rather than conciliation with Xi, raising doubts as to whether the world's two biggest economies can find common ground.

Topping the agenda at Trump’s Mar-a-Lago resort in Florida will be whether he will make good on his threat to use crucial U.S.-China trade ties to pressure Beijing to do more to rein in its nuclear-armed neighbor North Korea, which is working to develop missiles capable of hitting the United States.

Trump, a 70-year-old former real estate magnate with no foreign policy experience before entering the White House, has tweeted that it will be a "very difficult” meeting with the veteran Communist Party leader seven years his junior, given Chinese trade practices he says are killing U.S. jobs.

He has also demanded that Beijing do more to “solve” the North Korean problem – his biggest national security challenge - or he will act alone to deal with Pyongyang’s nuclear and missile programs.

Some White House aides believe Trump’s son-in-law and senior adviser Jared Kushner could be an influential moderating voice on how he handles Xi in their talks on Thursday and Friday. Contacts between Kushner and China’s U.S. envoy helped smooth the way for the meeting, according to current and former U.S. officials.

Even so, what worries the protocol-conscious Chinese more than policy clashes is the risk that the unpredictable Trump could publicly embarrass Xi, after several foreign leaders experienced awkward moments with the new U.S. president.

"Ensuring President Xi does not lose face is a top priority for China,” a Chinese official said.

U.S. presidents’ meetings with their Chinese counterparts are usually more tightly scripted than with other foreign leaders, something Chinese officials insist on to make sure they are treated with the decorum they believe befits a global power.

This summit should offer a study in contrasts: Trump impatient, outspoken and prone to angry tweet-storms; Xi, outwardly calm and measured, with no known social media presence.

Their shared nationalist tendencies could aggravate friction between their countries, which are increasingly global rivals.

Trump insists the United States has been cheated economically for decades by countries like China and must regain its luster, while Xi wants China, once an ancient empire, to be able to flex its muscles on the world stage.

“Xi and Trump are not natural friends,” said a former senior U.S. official specializing in Asia. "The question is when Trump’s ‘Make America Great Again’ hits Xi’s ‘Chinese Dream’, what’s the result?”

Won't Pull Punches


It remains unclear how far Trump will go in translating populist rhetoric into policy that steps up pressure on China, given the risk of a trade war neither country can afford.

But aides say he won't pull his punches, especially on trade, on which he has held an outspoken view for decades.

This adds to doubts as to whether the two leaders can find common ground on North Korea and China's expansive claims in the South China Sea.

Some analysts question whether Trump can get the better of Xi, who was born into a life of politics and has a reputation for being a tough tactician.

"Xi’s performed pretty well in these types of environments," said Christopher Johnson, a China expert and former CIA analyst at Washington's Center for Strategic and International Studies.

While Trump has been in office little more than 10 weeks, Xi has honed his U.S. strategy since assuming the Chinese leadership in 2013.

The son of a revolutionary leader, Xi has sought to project the image internationally of a strong advocate of globalization at a time when Trump has stoked fears of U.S. protectionism.

Still, Chinese officials are mindful of the pitfalls if Trump veers off-script.

Japanese Prime Minister Shinzo Abe found himself in a long, uncomfortable handshake at the White House in February, and Trump appeared to ignore German Chancellor Angela Merkel’s offer of a handshake during their meeting last month.

An acrimonious call between Trump and Australian Prime Minister Malcolm Turnbull caused particular concern in Beijing, officials there say.

Still, the decision to hold a summit so early in Trump’s presidency suggests both Washington and Beijing see the value of trying to build a personal relationship between the two leaders.

Trump goes into the meeting with significant gaps in his team of Asia advisers and his China policy still not fully formulated.

Hardliners like trade adviser Peter Navarro, who authored a book “Death by China,” have feuded over the administration's approach to China with more pragmatic aides such as economic adviser Gary Cohn, a former Goldman Sachs president, current and former U.S. officials say.

Administration officials argue Trump can use his “Art of the Deal” sales techniques to convince Xi that China needs the United States more than the United States needs China, especially when it comes to market access.

But analysts say the Chinese are shrewd enough at geopolitics to fend off U.S. demands. Xi may also see Trump politically weakened by his high-profile legislative failure on healthcare as well as his low public approval ratings.

Trump has already backed down on China's most sensitive issue - Taiwan - having first infuriated Beijing by suggesting he might not abide by Washington’s long-standing “one China” policy. Trump may now feel he is owed a favor in return.

A fence-mending phone call in February was arranged by Kushner and China’s U.S. ambassador, Cui Tiankai, officials say, after Cui invited Trump’s daughter Ivanka to the Chinese Embassy's Lunar New Year reception, where her daughter sang in Mandarin.

Both sides are keeping expectations low for tangible outcomes from the summit, billed as informal "get to know you" meetings similar to the 2013 Sunnylands summit in California between Xi and Trump’s predecessor, Barack Obama.

And whatever else, unlike Abe's February visit to Mar-a-Lago, there will be no golf diplomacy: China’s Communist Party associates golf with shady dealings and has sought to stop officials from playing it as part of Xi's fight against corruption.


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Pence Presents New Healthcare Offer To Freedom Caucus

By Peter Sullivan
The Hill
April 4, 2017

White House officials presented an offer to the conservative House Freedom Caucus on Monday night as they seek to revive the ObamaCare replacement bill.

Vice President Mike Pence and other White House officials presented an idea to the Freedom Caucus meeting to allow states to choose to apply for waivers to repeal two ObamaCare regulations that conservatives argue are driving up premiums.

Those two regulations detail ObamaCare's essential health benefits, which mandate which health services insurers must cover, and "community rating," which prevents insurers from charging sick people higher premiums.

Conservatives had previously called for the bill to repeal those regulations outright, but the deal now being discussed would give states a choice by allowing them to apply for a waiver from the federal government.

Freedom Caucus members expressed openness to the proposal, but cautioned that they need to review the legislative text, which they hoped would be available within the next 24 hours.

Multiple lawmakers said the White House is hoping to have a vote as soon as this week, though Rep. Mark Meadows (R-N.C.), the Freedom Caucus chairman, cautioned against setting "artificial" deadlines.

"There is no deal in principle; there is a solid idea that was offered," Meadows told reporters after the meeting.

"We're certainly encouraged by the progress we seem to be making," he added.

He said that repeal of the two regulations in question would provide enough "yes" votes to pass the bill, but cautioned that the Freedom Caucus needs to review the legislative language and make sure it is adequate.

No lawmakers who were previously opposed to the bill have switched their position because there is currently a lack of detail, Meadows said Monday night.

House leadership has not taken a hands-on approach so far to the revived negotiations, and as recently as a week ago was essentially saying the bill was dead.

There is also the question of how moderates would respond to the proposal. Centrists previously objected to adding repeal of the essential health benefits to the bill.

Rep. Chris Collins (R-N.Y.), a member of the centrist Tuesday Group, argued that giving states the choice, and making them meet certain standards in putting together a waiver application, could allay centrist concerns.

White House officials met with a group of centrists, as well as House Energy and Commerce Chairman Greg Walden (R-Ore.) earlier in the day.

It's unclear whether the changes would pass muster under Senate rules governing a filibuster.

Meadows indicated that officials are checking to at least make sure that the changes would not be "fatal" to the entire bill under the rules, though it is still possible the provisions would end up being struck out in the Senate.

While Meadows emphasized that the ban on denying coverage to people with pre-existing conditions would not be repealed, Democratic health experts point out that allowing insurers to charge sick people higher rates could effectively put coverage out of reach.

Meadows argued that a "stability fund" under the measure could subsidize higher premiums to bring down the cost for sick people. Lawmakers are also looking at better directing those $115 billion in stability fund dollars to target them toward reducing premiums.

Meadows indicated there would not be time for a Congressional Budget Office analysis of the changes if the new bill were voted on this week, which is sure to draw an outcry from some. That would mean lawmakers would not be certain of the cost or coverage effects of the bill when they voted.


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