The World Trade Organization raised its projection for global trade growth in 2021 and 2022 to 10.8% and 4.7%, respectively, citing the resurgence of economic activity in the first half of the year.
This year’s increase in merchandise trade would mark the biggest year-over-year jump since 2010. In March, the WTO projected that trade would increase by 8% in 2021 and 4% in 2022.
“Trade has been a critical tool in combating the pandemic, and this strong growth underscores how important trade will be in underpinning the global economic recovery,” WTO Director-General Ngozi Okonjo-Iweala said in a report released on Monday.
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The report warned, however, that uneven access to vaccines could exacerbate economic divergence.
“The longer vaccine inequity is allowed to persist, the greater the chance that even more dangerous variants of covid-19 will emerge, setting back the health and economic progress we have made to date,” Okonjo-Iweala said.
The WTO said the pandemic continues to present the biggest risk to the recovery in global trade and output.
To date, more than 4.7 million people worldwide have died of covid-19 and the number of global infections has passed 233 million, according to the World Health Organization.
The WTO also warned about the risks of an inflationary spike, which could persuade central banks to taper their expansive monetary policy early. “This could create negative spillovers, which would eventually hit trade flows,” according to the report.
The report added that the recent rise in inflation is “probably temporary, driven by supply-side shocks affecting certain sectors in specific economies balanced against the unexpectedly strong recovery in demand.”
The WTO’s optimistic projections could also be hampered by “longer port delays, higher shipping rates, and extended shortages of semiconductors, with supply side disruptions being exacerbated by the rapid and unexpectedly strong recovery of demand in advanced and many emerging economies.”
Gross domestic product fell 3.8% in 2020 and may expand by 5.3% this year and 4.1% in 2022, the WTO said. GDP growth has been “spurred on by strong monetary and fiscal policy support, and by the resumption of economic activity in countries that have been able to deploy coronavirus vaccines at scale,” according to the report.
U.S. stocks declined Monday as a sell-off in technology stocks resumed on the threat of persistently high inflation.
The S&P 500 fell 1.3% — dipping below its 100-day moving average — while the Nasdaq 100 shed 2.2% and the Dow Jones industrial average slid 0.9%.
The losses were led by high-growth technology companies — including Amazon.com Inc. and Facebook Inc. — while vaccine makers also fell on Merck & Co.’s announcement about an effective Covid-19 drug. Energy stocks, meanwhile, rose along with oil prices.
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“There’s a wall of worry that markets are trying to climb at the moment,” said Deutsche Bank strategist Jim Reid in a note. “We have an energy crisis, supply chain issues, higher inflation, signs of weaker growth, and lots of talk about stagflation.”
Global markets have taken a risk-off turn amid a growing list of worries, just as investors have been bracing for the Federal Reserve to begin tapering stimulus as early as next month. Higher inflation and Treasury yields make the premium investors pay for high-growth stocks less attractive. The risk to earnings may also be higher for some tech companies.
“Technology stocks are most likely getting hit the hardest because higher interest rates means higher discount rates for future earnings,” said Brian Price, head of investment management for Commonwealth Financial Network. “I would expect this dynamic to continue as long as inflation expectations remain at the higher end.”
Fears of a spreading energy crisis also added to concerns about inflation Monday with European power and gas prices surging before the onset of winter. The power contract for November in Germany hit a record while natural-gas futures extended a rally. Meanwhile, crude oil in New York surged to the highest since 2014 as OPEC+ agreed to an output hike for November.
“The post-pandemic recovery appears to be stumbling,” said Fiona Cincotta, senior financial markets analyst at City Index. “Supply shortages and a worsening energy crunch mean prices are rising and elevated inflation may not be as transitory as the Fed initially thought.”
President Joe Biden warned Monday that the U.S. government was also at risk of breaking its legal debt limit, describing the risk as a “meteor” headed for the economy.
The yield on the U.S. 10-year Treasury rose to 1.48%, paring back earlier gains. The dollar slid for a third day. And equities in Europe, Japan and Hong Kong fell.
Some of the main moves in markets:
Stocks
– The S&P 500 fell 1.3% as of 4 p.m. EDT
– The Nasdaq 100 fell 2.2%
– The Dow Jones industrial average fell 0.9%
– The MSCI World index fell 1%
Currencies
– The Bloomberg Dollar Spot Index fell 0.2%
– The euro rose 0.2% to $1.1621
– The British pound rose 0.5% to $1.3613
– The Japanese yen rose 0.1% to 110.93 per dollar
Bonds
– The yield on 10-year Treasurys advanced two basis points to 1.48%
– Germany’s 10-year yield advanced one basis point to -0.21%
– Britain’s 10-year yield was little changed at 1.01%
Commodities
– West Texas Intermediate crude rose 2.2% to $77.54 a barrel
Oil in New York rose to the highest since 2014 as an OPEC+ panel recommended proceeding with gradual supply hikes amid a rapidly tightening market.
Futures jumped as much as 1.8% after the Joint Ministerial Monitoring Committee advised a 400,000-barrel-a-day increase in November, several delegates said. The meeting will be followed by a full ministerial gathering to review the recommendation.
The market has tightened significantly following the economic recovery from the pandemic and supply disruption in the Gulf of Mexico due to Hurricane Ida. Surging natural gas prices have also raised the prospect of increased demand for oil products for power generation and are boosting inflationary pressures on the global economy.
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Modeling from the Organization of Petroleum Exporting Countries and its allies shows oil demand will outstrip supply over the next two months. Yet the alliance is unlikely to add more than the planned 400,000 barrels a day of output in November, Amrita Sen, chief oil analyst and co-founder of consultant Energy Aspects, said earlier.
“I’m not saying they won’t add more than 400,000 barrels a day down the line, but for today we think that’s unlikely,” Sen said in an interview with Bloomberg Television. “Saudi Arabia is very, very keen to reduce volatility, both on the upside and the downside. That’s the key. If suddenly prices spiked, then they’ll be very quick to react.”
OPEC+ production policy will be the main factor influencing oil prices over the coming months, according to Vitol Group. There’s little chance of Iranian barrels returning this year and U.S. shale producers aren’t investing enough to raise output quickly, Mike Muller, head of Asia for the oil trading house, said Sunday in a webinar hosted by Dubai-based consultant Gulf Intelligence.
Fuel switching due to high coal and gas prices is likely to drive up oil demand by 500,000 barrels a day this winter, Sri Paravaikkarasu, head of Asia oil at consultant FGE, told Bloomberg Television. A cold winter could see consumption climb by a further 200,000 to 300,000 barrels a day, she added.
The Stock Exchange of Thailand (SET) Index closed at 1,614.48 on Monday, up 9.31 points or 0.58 per cent. Transactions totalled 78.69 billion baht with an index high of 1,619.62 and a low of 1,610.96.
The index rose after dropping slightly by 0.03 per cent on Friday.
In the morning session, Krungsri Securities predicted the day’s index would fluctuate between 1,600 and 1,615 points despite positive sentiment of rising oil and coal prices, plus hopes over Thailand reopening after the domestic Covid-19 case has declined.
However, it said uncertainty over the US Federal Reserve signalling it would taper its quantitative easing and raise the interest rate sooner than expected, plus the conflict in US Congress corporate income tax hike, would pressure the index.
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The 10 stocks with the highest trade value today were KBANK, AOT, GULF, BANPU, BBL, PTT, GUNKUL, SCB, TRUE and COM7.
Japan’s Nikkei Index closed at 28,444.89, down 326.18 points or 1.13 per cent. Hong Kong’s Hang Seng Index closed at 24,036.37, down 539.27 points or 2.19 per cent. Taiwan’s TAIEX Index closed at 16,408.35, down 162.54 points or 0.98 per cent.
China and South Korea Indices were closed for National Day.
Asean, Australia and New Zealand are to upgrade their free trade agreement by 2022, while Asean Economic Ministers (AEM) in consultations with India have resolved to increase the free trade in goods and provide increased inter-market access in hopes of creating a market of more than 2 billion consumers.
Deputy Commerce Minister Sansern Samalapa told reporters on Sunday that the 26th AEM-Asean discussions with Australia and New Zealand on September 15 had welcomed the progress in negotiations on upgrading the Asean-Australia-New Zealand Free Trade Area (AANZFTA) agreement.
The meeting also acknowledged the importance of the AANZFTA Economic Cooperation Support Programme in implementing the agreement, with officials looking forward to a successor programme by 2022.
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Sansern said officials also exchanged views on Chile’s wishes to join the AANZFTA, which would play an important role in trade linkage between Asean and the Latin American region.
As for the 18th AEM-India Consultations held on September 14, Sansern said the meeting discussed the ASEAN-India Trade in Goods Agreement (AITIGA). The resolution of the AITIGA is to be accelerated to establish a joint committee in order to proceed with the agreement, which would be beneficial for both parties as this would form a combined market of more than two billion consumers.
“Thailand has emphasised the goal of making the AITIGA agreement to broaden modern market access, reduce trade barriers and provide more facilities for traders,” Sansern added.
The price of gold bobbed up by THB50 in morning trade on Monday.
A9.28am report from the Gold Traders Association showed the buying price of gold bar at THB27,950 per baht weight and selling price at THB28,050, while the buying and selling price of gold ornaments is THB27, 439.60 and THB28,550, respectively.
At close on Saturday, the buying price of gold bar was THB27,900 per baht weight and selling price THB28,000, while gold ornaments were THB27, 394.12 and THB28,500, respectively.
The baht opened at 33.64 to the US dollar on Monday, unchanged from the previous closing rate.
The Thai currency is likely to move between 33.55 and 33.75 during the day and between 33.40 and 34.00, Krungthai Bank market strategist Poon Panichpibool predicted.
Poon predicted that the dollar would drift sideways this week because investors are waiting for the Nonfarm Payrolls (NFP) report. If the NFP is better than expected, the quantitive easing (QE) might decrease next month and support the dollar to strengthen.
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Moreover, risk factors especially, US debt ceiling negotiation support the dollar’s momentum in the short term. Investors are keeping an eye on the negotiation. The US Congress must raise the debt ceiling before October 18 to avoid default.
The key resistance level for the baht would be at 34.00 to the dollar, which is the level at which exporters might sell the US currency.
The baht’s key support level would be from 33.40 to 33.60, the level some importers are waiting for so they can buy dollars, he added.
The market was in a risk-off state last week because the economic recovery slowed down with stagflation. The market was also pressured by the uncertainty from the US debt ceiling negotiation.
The Stock Exchange of Thailand (SET) Index rose by 9.97 points or 0.62 per cent to 1,615.14 on Monday morning, witnessing a high of 1,616.01 and a low of 1,610.96 in opening trade.
Krungsri Securities predicted the day’s index would fluctuate between 1,600 and 1,615 points despite positive sentiment of rising oil and coal prices, plus hopes over Thailand reopening after the domestic Covid-19 case has declined.
However, it said uncertainty over the US Federal Reserve signalling it would taper its quantitative easing and raise the interest rate sooner than expected, plus the conflict in US Congress corporate income tax hike, would pressure the index.
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It also recommended buying of the following companies’ shares as an investment strategy:
▪︎ Banpu, Lanna, DCC, Cotto and Tasco, which gained its specific positive sentiment.
▪︎ PTT, PTTEP, TOP, PTTGC, SPRC and IVL, which benefit from rising oil price.
▪︎ AOT, KBank, SCB, BBL, CPN, CRC, HMPro, AAV, BA, MINT, Amata and WHA, which benefit from the country reopening.
The SET Index closed at 1,605.17 on Friday, down 0.51 points or 0.03 per cent. Transactions totalled 75.66 billion baht with an index high of 1,609.48 and a low of 1,593.32.
By now youve probably heard about the fight over Section 230, the law shielding websites from lawsuits over what their users post, which has been under constant attack in Washington. But theres another high-stakes yet lower-profile feud brewing in Congress over platforms liability.
Lawmakers on the House Judiciary Committee on Wednesday advanced legislation that could open up e-commerce giants like Amazon and Walmart to lawsuits over the sale of counterfeit goods on their sites if they don’t meet a set of “best practices” to combat them.
Its proponents say passing the proposal – the SHOP SAFE Act – is critical to holding digital platforms accountable for the distribution of fake products on their sites and to give consumers peace of mind when shopping online.
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“Whether a purchase is made online or in a brick-and-mortar store, consumers must be able to be confident that what they see is what they will get,” Rep. Jerry Nadler, D-N.Y., the committee chair and lead sponsor on the bill, said during its committee markup Wednesday.
The issue has gained urgency during the coronavirus pandemic amid reports of fake vaccine cards, phony masks and other products proliferating online. Amazon in particular has been dinged by lawmakers and regulators in the past over the prevalence of counterfeits on its sites. (Jeff Bezos, who founded Amazon, owns The Washington Post.)
But some retail groups, tech trade associations and companies, and scholars have voiced concern that the bill would wreak havoc on e-commerce.
Eric Goldman, a law professor at Santa Clara University, wrote in a blistering post this week that the proposal would “drive most or all online marketplaces out of the industry” by imposing “onerous and expensive compliance obligations” that make it “impossible” to avoid liability.
The compliance requirements include verifying a third-party seller’s identity and mandating that sellers can verify or vouch for the authenticity of their goods. If companies take those and other steps, they would be immunized from liability over the sale of counterfeit goods by third-party vendors on their platforms under the bill.
Goldman also suggested the requirements are so steep that e-commerce behemoth Amazon may be the only company able to comply with it, thus creating “an insurmountable competitive moat around Amazon’s marketplace.”
The push has also gotten Silicon Valley’s attention. Major players including Facebook, Etsy and Amazon, as well as Walmart and Alibaba, tapped lobbyists to work on the legislation this year, according to disclosure filings reviewed by The Post.
Some of the companies, such as Etsy, Ebay and Walmart, are going on the record about their concerns.
“It’s clear from the debate at committee … that there remains work to be done on SHOP SAFE to best balance protecting both consumers and America’s small sellers,” Jeffrey Zubricki, head of U.S. government relations for Etsy, told The Post. He added that Etsy plans to work with lawmakers “to find that balance.”
Ebay said in a statement that the legislation “would debilitate individuals, entrepreneurs and small businesses trying to compete online.” It added, “Now is not the time to place harmful regulatory burdens on small businesses continuing to economically recover from the pandemic.”Walmart spokesman Randy Hargrove said the bill “as written could have significant unintended consequences.”
If the legislation picks up even more steam in Congress, it would become another major battlefront for tech companies over their legal liability.
Amazon and other retailers have fiercely opposed other similar efforts, including legislation earlier this year that would have required online marketplaces to authenticate the identity of the third-party merchants who sell on their sites. The language was scrapped from a major legislative package in June after a lobbying blitz by the industry.
Amazon spokesman Alex Haurek said the company recognizes the “intent” of the bill and they “look forward to working with Congress to achieve that goal.” Facebook and Alibaba did not return requests for comment on the bill.
At the markup, lawmakers stressed that the bill has been shaped by a lengthy drafting process and that they have fielded input from all corners.
Rep. Darrell Issa, R-Calif., one of the bill’s lead sponsors, called the legislation a “work in process” but said that there’s been “significant progress” on it.
Nadler said lawmakers had “drawn from industry recommendations and the robust input of a variety of stakeholders” in crafting the bill.
Sens. Chris Coons, D-Del., and Thom Tillis, R-N.C., introduced a companion to the legislation in the Senate earlier this year, making the bill bipartisan and bicameral. The next test will be getting the legislation voted by the full House and out of committee in the Senate.
Coons applauded House lawmakers’ efforts and said that he looks “forward to advancing the process in the Senate.”
The worlds electric grids are creaking under the pressure of volatile fossil-fuel prices and the imperative of weaning the world off polluting energy sources. A solution may be at hand, thanks to an innovative battery thats a cheaper alternative to lithium-ion technology.
SB Energy Corp., a U.S. renewable-energy firm that’s an arm of Japan’s SoftBank Group Corp., is making a record purchase of the batteries manufactured by ESS Inc. The Oregon company says it has new technology that can store renewable energy for longer and help overcome some of the reliability problems that have caused blackouts in California and record-high energy prices in Europe.
The units, which rely on something called “iron-flow chemistry,” will be used in utility-scale solar projects dotted across the U.S., allowing those power plants to provide electricity for hours after the sun sets. SB Energy will buy enough batteries over the next five years to power 50,000 American homes for a day.
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“Long-duration energy storage, like this iron-flow battery, are key to adding more renewables to the grid,” said Venkat Viswanathan, a battery expert and associate professor of mechanical engineering at Carnegie Mellon University.
ESS was founded in 2011 by Craig Evans, now president, and Julia Song, the chief technology officer. They recognized that while lithium-ion batteries will play a key role in electrification of transportation, longer duration grid-scale energy storage needed a different battery. That’s because while the price of lithium-ion batteries has declined 90% over the last decade, their ingredients, which sometimes include expensive metals such as cobalt and nickel, limit how low the price can fall.
The deal for 2 gigawatt-hours of batteries is worth at least $300 million, according to ESS. Rich Hossfeld, chief executive officer of SB Energy, said the genius of the units lies in their simplicity.
“The battery is made of iron salt and water,” said Hossfeld. “Unlike lithium-ion batteries, iron flow batteries are really cheap to manufacture.”
Commercial batteries at the Energy Storage Systems Inc. (Ess Inc.) facility in Wilsonville, Ore., on Sept. 28, 2021. MUST CREDIT: Bloomberg photo by Tojo Andrianarivo.
Every battery has four components: two electrodes between which charged particles shuffle as the battery is charged and discharged, electrolyte that allows the particles to flow smoothly and a separator that prevents the two electrodes from forming a short circuit.
Flow batteries, however, look nothing like the battery inside smartphones or electric cars. That’s because the electrolyte needs to be physically moved using pumps as the battery charges or discharges. That makes these batteries large, with ESS’s main product sold inside a shipping container.
What they take up in space, they can make up in cost. Lithium-ion batteries for grid-scale storage can cost as much as $350 per kilowatt-hour. But ESS says its battery could cost $200 per kWh or less by 2025.
Crucially, adding storage capacity to cover longer interruptions at a solar or wind plant may not require purchasing an entirely new battery. Flow batteries require only extra electrolyte, which in ESS’s case can cost as little as $20 per kilowatt hour.
“This is a big, big deal,” said Eric Toone, science lead at Breakthrough Energy Ventures, which has invested in ESS. “We’ve been talking about flow batteries forever and ever and now it’s actually happening.”
The U.S. National Aeronautics and Space Administration built a flow battery as early as 1980. Because these batteries used water, they presented a much safer option for space applications than lithium-ion batteries developed around that time, which were infamous for catching on fire. Hossfeld says he’s been able to get permits for ESS batteries, even in wildfire-prone California, that wouldn’t have been given to lithium-ion versions.
Still, there was a problem with iron flow batteries. During charging, the battery can produce a small amount of hydrogen, which is a symptom of reactions that, left unchecked, shorten the battery’s life. ESS’s main innovation, said Song, was a way of keeping any hydrogen produced within the system and thus hugely extending its life.
“As soon as you close the loop on hydrogen, you suddenly turn a lab prototype into a commercially viable battery option,” said Viswanathan. ESS’s iron-flow battery can endure more than 20 years of daily use without losing much performance, said Hossfeld.
At the company’s factory near Portland, yellow robots cover plastic sheets with chemicals and glue them together to form the battery cores. Inside the shipping containers, vats full of electrolyte feed into each electrode through pumps – allowing the battery to do its job of absorbing renewable power when the sun shines and releasing it when it gets dark.
It’s a promising first step. ESS’s battery is a cheap solution that can currently provide about 12 hours of storage, but utilities will eventually need batteries that can last much longer as more renewables are added to the grid. Earlier this month, for example, the lack of storage contributed to a record spike in power prices across the U.K. when wind speeds remained low for weeks. Startups such as Form Energy Inc. are also using iron, an abundant and cheap material, to build newer forms of batteries that could beat ESS on price.
So far, ESS has commercially deployed 8 megawatt-hours of iron flow batteries. Last week, after a six-month evaluation, Spanish utility Enel Green Power SpA signed a single deal for ESS to build an equivalent amount. SB Energy’s Hossfeld, who also sits on ESS’s board, said the company would likely buy still more battery capacity from ESS in the next five years.
Even as its order books fill up, ESS faces a challenging road ahead. Bringing new batteries to market is notoriously difficult and the sector is littered with failed startups. Crucially, lithium-ion technology got a head start and customers are more familiar with its pros and cons. ESS will have to prove that its batteries can meet the rigorous demands of power plant operators.
The new order should help ESS as it looks to go public within weeks through a special-purpose acquisition company at a valuation of $1.07 billion. The listing will net the company $465 million, which it plans to use to scale up its operations.
Commercial batteries at the Energy Storage Systems Inc. (Ess Inc.) facility in Wilsonville, Ore., on Sept. 28, 2021. MUST CREDIT: Bloomberg photo by Tojo Andrianarivo.
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