October 6, 2022

First Washington News

We Do Spectacular General & News

The Auto Sector Is Electrified as GM, Ford, and Sony Join Tesla’s Party

It’s all go in the autos sector at the start of 2022.


Toyota
sped past


General Motors
as the top-selling car company in the U.S. in 2021 as the Japanese auto maker’s sales accelerated. In contrast, GM’s U.S. sales went into reverse, partly due to the global chip shortage. GM has held the top spot in the U.S. since 1931, according to Automotive News. Forward-looking investors didn’t seem too concerned, as the stock changed gear, jumping 7.5% on Tuesday. It could go up another gear as the Detroit auto maker is expected to unveil an all-electric Chevy Silverado Wednesday.


Ford
has also been quick off the start line in 2022, announcing plans to double annual production of its F-150 Lightning electric pickup truck to 150,000, due to growing demand. The stock climbed 12% Tuesday to its highest close in more than 20 years.


Tesla
stock also began the year with a bang, surging 13.5% on Monday after reporting record fourth-quarter deliveries.

As if all that wasn’t enough to turn petrol heads,


Sony
announced plans to explore the commercial launch of electric vehicles at the CES trade show in Las Vegas. The Japanese conglomerate, which also unveiled a new prototype electric SUV, will launch Sony Mobility in the spring, a new company aimed at muscling into the EV space.

It isn’t just car makers getting in on the action. Chip maker


Qualcomm’s
CEO, Cristiano Amon, said he sees growing opportunities in cars, in an interview with Barron’s, following new partnerships with


Honda,


Renault,
and


Volvo.

After a year blighted by semiconductor shortages, production delays, and struggling sales, 2022 was also going to be a big one for the auto industry. It’s off to a blistering start.

Callum Keown

*** Join MarketWatch personal-finance reporter Jacob Passy today at noon as he talks to Michael Fratantoni, chief economist at the Mortgage Bankers Association, about the implications for the housing and mortgage markets of rising interest rates in 2022. Sign up here.

***

Insurance to Pay for More Expensive At-Home Covid Tests

Insurance companies will be required to reimburse consumers for at-home Covid-19 test kit purchases starting next week.


Walmart
and


Kroger
raised the price of a two-test kit by


Abbott Laboratories
after the end of an agreement with the government to sell them at cost.

  • Walmart, Kroger, and


    Amazon.com
    had a deal to sell Abbott’s BinaxNOW tests for $14 but that expired in December The Wall Street Journal reported. Walmart now sells them for $19.98, while Kroger charges $23.99.

  • The U.S. has doubled its purchase of


    Pfizer’s
    Covid-19 antiviral pills to treat high-risk individuals, to 20 million treatments. President Joe Biden said the first batch of pills went out Christmas Eve, and more will ship this week.

  • The U.S. reported 1,082,549 new coronavirus infections on Monday, including the delayed count from the holiday weekend, according to Johns Hopkins University. The total is more than double the previous record set five days ago.

  • U.S. residents aged 16 and older who received their second dose of the Pfizer-


    BioNTech
    Covid-19 vaccine can get a booster shot five months later, rather than six, the Centers for Disease Control and Prevention said. The CDC also recommended third doses for immunocompromised children aged five to 11.

What’s Next: A CDC vaccine advisory panel will meet Wednesday to consider boosters for 12- to 15-year-olds. The Food and Drug Administration authorized booster doses of the Pfizer-BioNTech Covid-19 vaccine on Monday, but the CDC’s approval is needed before they become available.

Janet H. Cho

***

Consumer Tech Sales Expected to Slow in 2022

U.S. consumer tech retail sales will slow to 2.8% growth to $505 billion this year, after a 9.6% gain last year, according to the Consumer Technology Association’s forecast released ahead of the CES tech trade show opening Wednesday in Las Vegas.

  • Tech sales soared during the pandemic when people worked and attended classes from home, and more companies increased their digital commerce. The CTA sees software and services growth slowing to 6% in 2022, from 11.4% in 2021. Hardware growth will trickle to 1.8%, down from last year’s 9%.

  • Steve Koenig, CTA’s vice president for research, noted that the hardware business is being hampered by higher shipping costs and semiconductor shortages, with average lead times for semiconductors stretching to 22 weeks in late 2021, compared with less than 12 weeks in 2020.

  • Electric and autonomous cars, trucks, bikes, and boats headline this year’s show, including


    Deere’s
    autonomous tractor with an attached tillage implement. Julian Sanchez, Deere’s director of emerging technologies, told Barron’s that tillage is a labor-intensive process to prepare the soil for next year’s planting.

  • Deere said its tractor can run “fully driverless” around the clock, with six stereo cameras to detect holes, debris, and other obstacles, and could improve productivity by as much as 20%. Deere wants to design its tractor to perform tasks such as planting and spreading herbicides.

What’s Next: Koenig said the real solution to the global chip shortage is new manufacturing facilities planned by


Intel,


Samsung Electronics,


Taiwan Semiconductor
and others, which will reduce reliance on chips from East Asia. But those are all still several years away.

—Eric J. Savitz and Janet H. Cho

***

‘Help Wanted’ Drops Most in Food Service and Accommodation

The food service and accommodation industry made up the biggest decline in job openings in November, dropping to 1.3 million openings from 1.6 million a month earlier, according to Bureau of Labor Statistics data released Tuesday. Overall, job openings dropped to 10.6 million from 11.1 million in October.

  • About 4.5 million people quit their jobs in November, a record quit rate of 3%. The November Job Openings and Labor Turnover Survey doesn’t include the effects of the Omicron coronavirus variant, which began spreading in December and comprised an estimated 95.4% of cases by Jan. 1.

  • Daniel Zhao, senior economist at careers website Glassdoor, told MarketWatch the slowdown in job openings is “a natural response to the pandemic worsening as employers hesitate to go full force on hiring” until conditions improve. Employers are “desperate” to keep their workers.

  • One


    McDonald’s
    franchisee in Altamont, Ill., northeast of St. Louis, is offering free iPhones to new hires who stay at least six months, with a sign in the window saying: “Now Hiring. Free iPhone.”


    Chipotle
    and


    Yum! Brands
    ’ Taco Bell are offering cash bonuses, raises and tuition benefits.

  • Leisure and hospitality also raised their average hourly pay by 12.6% year-over-year. Demand for leisure and hospitality workers remains strong, but jobs have declined from a peak of 1.9 million in July 2021, wrote Nick Bunker, director of economic research at Indeed Hiring Lab.

What’s Next: On Friday, the Labor Department reports December employment figures, including nonfarm payrolls, labor-force participation rate, and the unemployment rate. Economists will be looking for corroboration that labor demand has cooled.

Lisa Beilfuss and Janet H. Cho

***

KFC to Offer Beyond Meat’s Plant-Based Fried Chicken

KFC will start selling fake chicken made by Beyond Meat in its restaurants nationally next Monday, for a limited time until supplies run out, the two companies announced, calling it a “Kentucky Fried Miracle.”

  • The Yum! Brands company has been testing plant-based chicken products in its restaurants since 2019, in locations such as Atlanta, Nashville, and Charlotte. It also tested the plant-based fried chicken in Southern California in 2020, selling out in a week.

  • Beyond Meat stock soared 9% on Tuesday after word of the offering. The two companies made an agreement a year ago where Beyond would make meat substitutes for KFC, Taco Bell, and Pizza Hut.

  • The two are counting on a number of people choosing to eat more plant-based food in the New Year. Mexican food chain Chipotle unveiled its plant-based chorizo sausage on Monday.

  • Beyond Meat had initial success in grocery stores and then faltered. Its shares are down 50% in the past year, and the company reported disappointing third-quarter results, with a gloomy sales outlook.

What’s Next: McDonald’s has been testing a plant-based burger called McPlant in eight locations and is expected to expand the rollout this year, possibly by the end of the first quarter, as a limited time offer.

Liz Moyer

***

First Signals Emerge That Inflation Might Near Peak

Data released this week seem to indicate inflation might be nearing its peak in Western economies.

  • The Institute for Supply Management’s composite index, a key U.S. business survey, stood at 58.7 in December, falling short of expectations but showing a continued expansion for U.S. factories.

  • The data also showed that manufacturers’ input prices and supplier delivery delays declined month on month. That was “the biggest monthly drop in the prices paid measure in over a decade, and leaves it at its lowest level since November 2020,” Deutsche Bank analysts wrote.

  • The same trend is at work at the global level, with the JPMorgan global manufacturing purchasing managers index also indicating that supply-chain bottlenecks seem to be fading, even though they haven’t disappeared.

  • The minutes of the last Federal Reserve meeting, to be released later Wednesday, will give an idea of how fast and strong the U.S. central bank intends to keep tightening its policy to tame inflation, which it no longer sees as “transitory.”

What’s Next: Prices keep rising, but maybe at a slower pace than in the past few months, prompting France’s top central banker to declare that inflation is now “close to its peak,” after data showed December inflation stable compared with November.

Pierre Briançon

***

Dear Quentin,

I grew up thinking we were the perfect family. My parents were married for 60 years, and my siblings have always been very close. My mom passed away a few years ago. For fun, we all took one of those DNA tests and, shockingly, I found out that I was the product of an affair.

While I haven’t been able to confirm 100%, I have a good idea of who my biological dad is through some mutual relatives and friends. I do remember him and his family. Here’s the kicker, he won’t discuss anything with me.

In fact, his first question was, “What do you want?” Honestly, I really wanted answers. I can’t get them from mom and don’t want to break my father’s heart. I don’t know if he knows or not. He’s elderly and not well.

While my father—the one I’ve only known to raise me—is alive, I don’t know if I want a relationship with my half siblings or not. It’s all very overwhelming. However, my biological father is also elderly and in poor health.

My siblings have counseled me to consider what I may be entitled to as an inheritance as this man is actually very well off, and always has been. Ironically, my parents purchased a home from him and his wife many years ago.

I don’t even know what I may be entitled to, whether I want it or not, whether I want any relationships, etc. Can you help guide me on the financial side of this affair?

—Confused

Read The Moneyist’s response here.

Quentin Fottrell

***

—Newsletter edited by Liz Moyer, Camilla Imperiali, Steve Goldstein, Rupert Steiner