Raphael Stevens

India reported 247,417 new infections over a 24-hour period on Thursday, according to government data.
The sharp rise in cases have led economists to become more cautious about the January-March quarter outlook, but they also expect less severe impact than before.
Citi economists revised down their growth projections for India: The estimated GDP for fiscal 2022 was revised by 80 basis points to 9%.

Covid lab technicians in India on Friday Jan. 7, 2022.
Bloomberg | Bloomberg | Getty Images

India is experiencing a third wave of Covid infections — while its overall impact is expected to be less disruptive than previous waves, some economists are predicting slower growth in the near term.
The economic impact of the new wave could be relatively less severe in the first three months of 2022, Citi economists Samiran Chakraborty and Baqar M Zaidi wrote in a Jan. 9 note.

But they pointed out that the momentum for India’s economic activity between October and December fell below expectations, even before the third wave hit.
That led the Citi economists to revise down their inflation-adjusted GDP estimates for India for fiscal year 2022. Growth is predicted to fall by 80 basis points from 9.8% year-on-year to 9% largely due to weaker economic activity in the October-December quarter, Chakraborty and Zaidi said.
Consequently, they also revised down their fiscal 2023 growth estimates from 8.7% year-on-year to 8.3%.
India’s fiscal year 2022 ends in March, and its fiscal year 2023 starts on April 1 and ends Mar. 31 next year.

Omicron in India

Covid cases are surging in India again, with daily figures exceeding 150,000 in recent days.

Government data showed India reported 247,417 new infections over a 24-hour period on Thursday, with the daily positivity rate — which measures the share of Covid-19 tests that are positive — at 13.11%.
There are more than 1.1 million active cases of infection in the country, according to the data.
So far, India has identified 5,488 cases of Covid infections that were caused by the new, highly contagious omicron variant that was first detected by South African scientists. It is likely that the number of omicron cases in India is much higher than what has officially been reported so far as it takes time for genetic sequencing to determine if a person with Covid contracted the new strain.
The predominant strain in India is still delta.
While India’s health-care infrastructure is relatively better prepared to tackle the third wave, a rapid uptick in cases could potentially push it to the brink again.
“Regional variations in access to healthcare personnel, medical facilities, oxygen ventilators and critical care underscore the need for proactive action before caseloads intensify beyond the metros,” Radhika Rao, a senior economist at Singapore’s DBS Group, said in a Jan. 6 note.

We expect far less economic damage from the current outbreak compared to the first two waves of infections as the economy has adjusted to be more resilient…

Priyanka Kishore
Oxford Economics

The impact of the third wave could potentially worsen in the coming weeks and months. Thousands of pilgrims are expected to gather at the Ganges River in the eastern state of West Bengal this week for an annual festival, local media reports said.
Last year, a similar large-scale religious gathering was partly responsible for the devastating second wave of infections between February and May.

Economic impact

While the sharp rise in cases led economists to become more cautious about the January-March quarter outlook, they are also expecting a less severe impact than before.
“We expect far less economic damage from the current outbreak compared to the first two waves of infections as the economy has adjusted to be more resilient to Covid-related disruptions,” Priyanka Kishore, head of India and Southeast Asia economics at Oxford Economics, wrote in a Jan. 8 note.
Still, she said Oxford Economics has lowered its growth forecast for the January-March quarter by almost 0.5 percentage points to 2.5% quarter-on-quarter to “reflect the third wave of Covid infections.”
The latest surge is expected to lead to another slump in India’s private consumption as states step up restrictions to limit the spread of the virus.

She added that the subsequent April-June to quarter is set to be the start of a more “durable recovery” as by then, a large percentage of the population are expected to be fully vaccinated.
Citi’s economists said there are reasons to be hopeful for a less disruptive Covid wave. They include: lower hospitalization rates — such as what’s currently seen in cities like Mumbai — a shorter Covid wave cycle, higher vaccination coverage and a weakening link between Covid and economic activity.
“Higher vaccination coverage will provide support to policymakers in avoiding strict restrictions,” they wrote.
India has fully inoculated nearly 70% of its adult population and rolled out a vaccination drive this year for those between 15 and 18 years old.

Inflationary pressure in India

It’s unlikely that the Reserve Bank of India would consider raising interest rates before the second quarter as the central bank looks to prioritize growth risks over near-term inflation spike, according to Kishore from Oxford Economics.
Rising prices are a concern as retail inflation in India hit a 5-month high in December.
DBS Group’s Rao said the RBI last month indicated its preference for “a gradual road towards policy normalisation,” and diverging from global policy shifts — particularly from the U.S. Federal Reserve.

People crowd not following social distancing norms amid Covid-19 pandemic at Juhu Beach, on January 2, 2022 in Mumbai, India.
Pratik Chorge | Hindustan Times | Getty Images

Supply disruptions could potentially keep inflation on the upper end of the RBI’s 2% to 6% target range in fiscal 2023, according to Rao.
“Sticky inflation and global rate adjustments prompt us to retain our call for the repo rate to be adjusted by a cumulative 50bps in 2H,” she said.

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Ford’s market value topped $100 billion for the first time ever, as the automaker’s stock hit a new 52-week high Thursday.
The company’s shares jumped by as much as 5.7% to $25.87, continuing a more than 20-year high for the automaker’s stock price.

Ford Motor Co. CEO Jim Farley walks to speak at a news conference at the Rouge Complex in Dearborn, Michigan, September 17, 2020.
Rebecca Cook | Reuters

DETROIT – Ford Motor’s market value topped $100 billion for the first time ever as the automaker’s stock hit a new 52-week high Thursday.
The company’s shares jumped Thursday by as much as 5.7% to $25.87, hitting another 20-plus-year high, before closing at $25.02 a share, up 2.3%. Its market value dropped to $99.99 billion.

The gains have been fueled by Ford’s plans to increase production of electric vehicles, including the Mustang Mach-E crossover and an upcoming electric version of its bestselling F-150 pickup that’s due out this spring. The efforts are part of a Ford+ turnaround plan led by CEO Jim Farley, who took over the helm in October 2020.
Ford’s now worth more than crosstown rival General Motors, at about $90 billion, as well as electric vehicle start-up Rivian Automotive, at $72 billion, which has failed to sustain gains following a blockbuster IPO in November. Ford continues to significantly trail Tesla, which has a market cap of more than $1 trillion.
The automaker is rated overweight with a price target of $21.83 a share, according to an average of 22 analysts compiled by FactSet. But not all Wall Street analysts haven’t completely bought into Ford’s turnaround.

“The stock market’s attraction to the Ford EV story continues to take us by surprise,” Morgan Stanley analyst Adam Jonas told investors in a Thursday note called “Ford Market Cap Crosses $100bn: What’s In the Price?”
Morgan Stanley’s price target for Ford is $12 a share. Its bull case for the stock is $25 a share, according to Jonas.

“Ford’s share price movement is impressive and management deserve credit for changing the strategic narrative, triggering a re-rating,” Jonas said. “However, at this juncture, we believe the risks facing Ford and the sector are rising faster than the opportunity.”
Jonas cited concerns involving the auto industry’s historically cyclical nature returning, challenges in scaling EV production and more competitive and appealing EVs entering the market against Ford.
– CNBC’s Michael Bloom contributed to this report.

Read more about electric vehicles from CNBC Pro

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The Supreme Court ruling that barred the Biden administration’s Covid vaccine mandate for employees of large employers will not prevent companies from requiring shots for their workers.
President Joe Biden vowed to push for companies to do just that in order to save lives and prevent even more economic fallout from the two-year coronavirus pandemic.
The Supreme Court blocked a rule that would have required companies with at least 100 employees to have workers either be vaccinated against Covid-19 or wear masks on the job and test negative for the virus at least once per week.

A healthcare worker prepares a syringe with the Moderna COVID-19 vaccine at a pop-up vaccination site operated by SOMOS Community Care during the COVID-19 pandemic in Manhattan in New York City, January 29, 2021.
Mike Segar | Reuters

The Supreme Court ruling that barred the Biden administration’s Covid vaccine mandate for employees of large employers will not prevent U.S. companies from requiring vaccinations for their workers.
President Joe Biden vowed Thursday to push for companies to do just that in order to save American lives and prevent even more financial fallout from the two-year coronavirus pandemic.

“The Court has ruled that my administration cannot use the authority granted to it by Congress to require this measure, but that does not stop me from using my voice as President to advocate for employers to do the right thing to protect Americans’ health and economy,” Biden said in a statement.
“I call on business leaders to immediately join those who have already stepped up – including one third of Fortune 100 companies – and institute vaccination requirements to protect their workers, customers, and communities,” Biden said.
The Supreme Court earlier Thursday blocked a rule issued in the fall by the Occupational Safety and Health Administration that would have required companies with at least 100 employees to have workers either be vaccinated against Covid-19 or wear masks on the job and test negative for the virus at least once per week.

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The high court in its decision said that while OSHA had power granted by Congress to regulate occupational dangers, the agency did not have the authorization “to regular public health more broadly.”
Kathryn Bakich, a senior vice president who focuses on workplace compliance issues for the employee benefits consulting firm Segal said, “Although the Supreme Court stayed the federal government’s OSHA rule, the ruling has no bearing on whether an individual employer can impose a vaccine mandate on its workforce.”

Bakich noted that the high court on the same day allowed a Biden administration mandate for vaccinations of millions of health-care workers at employers who treat patients covered by the massive federal Medicare and Medicaid health programs.
“Employers shouldn’t read into the decision a lack of support for vaccines, workplace vaccine requirements, or meaningful public health measures,” Bakich said.
The National Retail Foundation praised the ruling blocking the mandate on large companies as a “significant victory” for employers.
The NRF noted in a statement that it had joined with more than two dozen other trade associations to make oral arguments this week opposing the mandate, which it called “onerous and unprecedented.”
But the retail foundation also said it “has maintained a strong and consistent position related to the importance of vaccines in helping to overcome this pandemic.”
And, anticipating Biden’s later statement on the ruling, the NRF said it “urges the Biden Administration to discard this unlawful mandate and instead work with employers, employees and public health experts on practical ways to increase vaccination rates and mitigate the spread of the virus in 2022.”
David Gordon, a partner at the New York law firm Mitchell Silberberg & Knupp, said that as a result of the Supreme Court ruling, “employers will now be free to set their own requirements, subject to applicable state and local laws.”
Gordon noted that, “This ruling makes no difference for New York City employers and employers in other jurisdictions that will require that all employees be vaccinated.”
“Employers in those locations will still be subject to applicable vaccine mandates,” he said.
But Gordon also said the ruling will allow a large employer to make a decision on vaccinations that reflects competition in the job market for workers.
“It’s no longer an even playing field among large employers in terms of recruitment,” Gordon said. “Now, if a large employer believes that it would be advantageous not to require employees to be vaccinated, it will be free not to adopt a vaccine mandate if permissible where they are located.”
Starbucks last month said that all American workers of the giant coffee shop chain must be vaccinated by Feb. 9 or be tested.
Previously, large employers including American Express, Amtrak, Citigroup, General Electric, Google, Jeffries, NBCUniversal, Southwest Airlines, Tyson Foods and United Airlines had imposed vaccine mandates on employees, or at least on workers who were returning to physical offices.
Disclosure: NBCUniversal is the parent company of CNBC.

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The Supreme Court on Thursday blocked the Biden administration from enforcing its sweeping vaccine-or-test requirements for large private companies.
But the conservative-majority court allowed a vaccine mandate to stand for medical facilities that take Medicare or Medicaid payments.
The OSHA mandate required that workers at businesses with 100 or more employees get vaccinated or submit a negative Covid test weekly to enter the workplace.

The Supreme Court on Thursday blocked the Biden administration from enforcing its sweeping vaccine-or-test requirements for large private companies, but allowed a vaccine mandate to stand for medical facilities that take Medicare or Medicaid payments.
The rulings came three days after the Occupational Safety and Health Administration’s emergency measure for businesses started to take effect.

The mandate required that workers at businesses with 100 or more employees get vaccinated or submit a negative Covid test weekly to enter the workplace. It also required unvaccinated workers to wear masks indoors at work.
“Although Congress has indisputably given OSHA the power to regulate occupational dangers, it has not given that agency the power to regulate public health more broadly,” the court wrote in an unsigned opinion.
“Requiring the vaccination of 84 million Americans, selected simply because they work for employers with more than 100 employees, certainly falls in the latter category,” the court wrote.

A demonstrator holds a “Freedoms & Mandates Don’t Mix” sign outside the U.S. Supreme Court during arguments on two federal coronavirus vaccine mandate measures in Washington, D.C., U.S., on Friday, Jan. 7, 2022.
Al Drago | Bloomberg | Getty Images

Liberal Justices Stephen Breyer, Sonia Sotomayor and Elena Kagan dissented, writing that the majority has usurped the power of Congress, the president and OSHA without legal basis.
“In the face of a still-raging pandemic, this Court tells the agency charged with protecting worker safety that it may not do so in all the workplaces needed,” they said in their dissent.

“As disease and death continue to mount, this Court tells the agency that it cannot respond in the most effective way possible. Without legal basis, the Court usurps a decision that rightfully belongs to others. It undercuts the capacity of the responsible federal officials, acting well within the scope of their authority, to protect American workers from grave danger,” they wrote.
President Joe Biden, in a statement, said the Supreme Court chose to block requirements that are life-saving for workers. Biden called on states and businesses to step up and voluntarily institute vaccination requirements to protect workers, customers and the broader community.
“The Court has ruled that my administration cannot use the authority granted to it by Congress to require this measure, but that does not stop me from using my voice as President to advocate for employers to do the right thing to protect Americans’ health and economy,” Biden said.
Labor Secretary Marty Walsh called the court’s decision a major setback for the health and safety of workers, vowing OSHA would use its existing authority to make sure businesses are protecting employees. The American Medical Association, one of the largest doctors’ groups in the nation, said it was “deeply disappointed.”
“In the face of a continually evolving COVID-19 pandemic that poses a serious danger to the health of our nation, the Supreme Court today halted one of the most effective tools in the fight against further transmission and death from this aggressive virus,” AMA President Gerald Harmon said.
In a separate, simultaneously released ruling on the administration’s vaccination rules for health-care workers, a 5-4 majority sided with the Biden administration.
“We agree with the Government that the [Health and Human Services] Secretary’s rule falls within the authorities that Congress has conferred upon him,” said the majority, writing that the rule “fits neatly within the language of the statute.”
“After all, ensuring that providers take steps to avoid transmitting a dangerous virus to their patients is consistent with the fundamental principle of the medical profession: first, do no harm,” the majority opinion read.
Justices Clarence Thomas, Samuel Alito, Neil Gorsuch and Amy Coney Barrett, four of the six conservatives on the nine-seat bench, dissented.
“I do not think that the Federal Government is likely to be able to show that Congress has authorized the unprecedented step of compelling over 10,000,000 healthcare workers to be vaccinated on pain of being fired,” Alito wrote in his dissent.
Biden, in a statement, said the vaccine requirement for health-care workers will save the lives of patients, doctors and nurses. “We will enforce it,” the president said of the mandate.
OSHA, which polices workplace safety for the Labor Department, issued the business mandate under its emergency power established by Congress. OSHA can shortcut the normal rulemaking process, which can take years, if the Labor secretary determines a new workplace safety standard is necessary to protect workers from a grave danger.

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The court’s decision to strike down the business mandate comes as the pandemic rages across the U.S., with the highly contagious omicron variant driving an unprecedented surge of new infections. The U.S. is reporting 786,000 new infections daily on average, a pandemic record and a 37% increase over last week, according to CNBC analysis of data from Johns Hopkins University.
Hospitalizations have also reached a pandemic high based on federal data going back to the summer of 2020. There are 149,000 Americans in U.S. hospitals with Covid, according to a seven-day average of data from the Department of Health and Human Services, up 27% over the past week.
The vaccine-or-test rules faced a raft of lawsuits from 27 states with Republican attorneys general or governors, private businesses, religious groups and national industry associations such as the National Retail Federation, the American Trucking Associations and the National Federation of Independent Business.
The NRF, in a statement, called the Supreme Court ruling a “victory,” urging the Biden administration “to discard this unlawful mandate and instead work with employers, employees and public health experts on practical ways to increase vaccination rates and mitigate the spread of the virus in 2022.”
The mandates were the most expansive use of power by the federal government to protect workers from Covid since the pandemic began. Taken together, the Biden administration estimated that the rules for businesses and health care workers would apply to approximately 100 million Americans.
But both rules had been in flux well before the Supreme Court took them on. The OSHA rules were blocked in November by a conservative federal appeals court, then reinstated by a different court weeks later.
The White House at the time urged businesses to follow the public safety requirements even if they were not being enforced.
Some companies have done so, and others have implemented their own rules. A number of large employers, including Citigroup, Nike and Columbia Sportswear, in recent days have said they would begin firing unvaccinated workers.
— CNBC’s Christina Wilkie contributed to this report.

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In the past 20 years used cars’ contribution to inflation averaged zero. It’s now more than 1% on a year-over-year basis, according to the White House.
The price of used cars is also having an outsized high impact on overall headline inflation, according to Jared Bernstein, an economic advisor to President Joe Biden.
Cox Automotive reports the average retail price for a used vehicle was a new record of more than $28,000 in December.
The potential upside for the Biden administration is that inflation is expected to moderate organically and as the Federal Reserve looks to raise interest rates this year.

A pedestrian walks past a certified pre-owned car sales lot in Alhambra, California on January 12, 2022.
Frederic J. Brown | AFP | Getty Images

Despite President Joe Biden’s upbeat comments on what seem to be early signs of a peak in inflation, used car prices continue to rise at levels not seen at any time this century prior to the Covid-19 pandemic.
The Biden administration has blamed much of the rising inflation rates in the country on the used vehicle market. The problem, which the White House acknowledges, is that there’s not much it can do to assist in lowering the rates right now.

In the past 20 years used cars’ contribution to inflation averaged zero. It’s now more than 1% on a year-over-year basis, according to data from the U.S. Bureau of Labor Statistics.
In December, prices consumers paid for goods and services rose 0.5% while used car prices rose 3.5%. Based on a weighted calculation of that price change and Americans’ demand for used cars, the Labor Department estimates that used car prices contributed 0.112 percentage points to the overall 0.5% increase.
The price of used cars is also having a historically high impact on overall headline inflation, according to White House economic advisor Jared Bernstein. Bernstein, who sits on Biden’s Council of Economic Advisers, wrote that he finds used cars’ impact on headline inflation “remarkable and revealing.”
“It’s a reminder of how extremely unusual this current inflation is,” he continued. “The world has not forgotten how to produce new (and thus used) cars and we should expect this series to revert once the underlying supply constraint eases.”
Reflecting a view held by most economists, Bernstein wrote that the primary supply-chain hiccup responsible for both used car inflation and its impact on the consumer price index data is a shortage of semiconductors used in the manufacturing of new cars.

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Economists say that backlog is thanks to the Covid-19 pandemic, which shuttered factories around the world and disrupted shipping routes over the past two years. Those logistical hurdles are believed the chief suspect behind a massive 25% climb in used car prices in 2021, according to industry insights company Cox Automotive.
But the pandemic changed consumers’ demand for cars and forced hundreds of thousands to cancel or postpone travel plans in 2020. That one-time mass cancellation led to unprecedented demand for cars in the spring of 2021 as vaccines and relaxed public-health rules allowed entire populations to schedule vacations and other travel at the same time.
“There’s still a lot of demand out there that just has not been met yet. It’s unsatiated demand,” Charlie Chesbrough, senior economist and senior director of Industry Insights at Cox Automotive, told CNBC. “Until the new market can rebuild such that demand is met and that there is enough product out there for everybody, the U.S. markets are going to continue to be doing very robust sales.”
Simply put: Without new vehicles, you can’t have used vehicles.
Cox Automotive reports the average retail price for a used vehicle was a new record of more than $28,000 in December.
“I think there’s very little reason to expect to see any kind of price decline in the use vehicle market anytime soon,” Chesbrough said.
The president’s approval ratings have suffered in recent months, and many surveyed voters told CNBC and Change Research that they are concerned about the Biden administration’s handling of the economy. Sixty percent of the survey’s 1,895 respondents said they disapprove of Biden’s handling of the economy, a six-percentage-point decline in approval from September.
But the White House is doing all it can to stress to Americans that it’s doing all it can to remedy the price increases.
As Bernstein noted on Twitter, there are some measures the White House is pursuing that could help ease car price pressure in the longer term. The pending U.S. Innovation and Competition Act, which the Senate passed in June, would pour billions into domestic chip production as Washington looks to curb China’s dominance in the industry.
The potential upside for the Biden administration is that inflation is expected to moderate organically and as the Federal Reserve looks to raise interest rates this year.
Used-vehicle prices normally increase in the spring, so Cox Automotive expects pricing to continue to increase. But in the second half of the year, the company is forecasting inflation to end, and a more normal pattern of depreciation to resume.
Bank of America economist Alex Lin told CNBC last month that in used car prices — and overall inflation — face some fierce year-over-year comparisons starting in the spring. The thinking goes that if sellers hiked used car prices in early 2021, they would have to have to hike them by the same percent this year if inflation is to remain at the same levels.
And that, Lin said, is pretty unlikely.
“Wholesale prices since the pandemic are up more than 60%,” Lin said in December. “So the question is: Will we see another 60% next year?”
“I mean, I hope not,” he added. “But I guess I would be skeptical about that as a base case.”

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