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    Baltimore bridge port blockade won’t trigger new supply chain crisis, experts say

    WASHINGTON (Reuters) – The catastrophic bridge collapse that closed the Port of Baltimore to ship traffic is unlikely to trigger a major new U.S. supply chain crisis or spike goods prices, due to ample and growing spare capacity at competing East Coast ports, economists and logistics experts say.With six people still missing after a container ship collision destroyed the Francis Scott Key Bridge, it remained unclear how long the span’s twisted superstructure would block the harbor’s mouth.But port officials from New York to Georgia were busy on Tuesday fielding queries from shippers about diverting Baltimore-bound cargo from containers to vehicles and bulk material. “We’re ready to help. We have ample capacity to absorb any surge in container traffic,” Port of Virginia spokesperson Joe Harris told Reuters. The Norfolk-based port is seen as a major beneficiary, due to its close proximity to Baltimore, but ports in Savannah and Brunswick (NYSE:BC), Georgia, also were poised to absorb some traffic, a spokesperson for the Georgia Ports Authority said.The situation is a marked shift from the clogged, understaffed ports and supply chain chaos of 2021 and 2022 that spiked prices and fueled inflation as Americans binged on imported goods purchases coming out of the COVID-19 pandemic.East Coast ports have invested billions of dollars over the past decade to expand capacity and while the temporary closure at Baltimore may add time and cost for some companies, economists do not expect a significant macroeconomic impact.”The collapse of the Francis Scott Key Bridge in Maryland is another reminder of the U.S. vulnerability to supply-chain shocks, but this event will have greater economic implications for the Baltimore economy than nationally,” Ryan Sweet, chief U.S. economist at Oxford Economics, wrote in a note.”We don’t anticipate that the disruptions to trade or transportation will be visible in U.S. GDP, and the implications for inflation are minimal,” he added.NO SHIPS, NO WORKThe impact on the Port of Baltimore’s more than 2,000 workers who load and unload cargo vessels could be significant if the closure lasts more than a few days. The dockworkers are day laborers, said Scott Cowan, head of the International Longshoreman’s Association Local 333 in Baltimore, meaning they only work when there is cargo to be moved. He estimated there might be about a week’s work clearing the existing inventory at the port. “After that,” he said, “we’re dead in the water” with a collective $2 million a day in lost wages at stake.The port directly generates over 15,000 jobs, with an additional 140,000 jobs dependent on port activity, according to Maryland Governor Wes Moore’s office. VEHICLE PORT One area of concern is higher shipment costs for imported cars and trucks and for exports of farm tractors and construction equipment as Baltimore is the largest U.S. port for “roll-on, roll-off” vehicle shipments, with over 750,000 cars and light trucks handled by state-owned terminals in 2023, according to Maryland Port Administration data.Ford Motor (NYSE:F) Co and General Motors (NYSE:GM) said they would reroute some affected shipments but the impact would be minimal, while Volkswagen (ETR:VOWG_p) is unaffected because its new Sparrows Point vehicles terminal is located at a former steel mill site on the bridge’s Chesapeake Bay side.The risk of car price spikes is further dampened by a recovery in automotive inventories to their highest level since May 2020, after being drawn down sharply during the pandemic. The industry’s inventory-to-sales ratio is near its 32-year-average of 1.96 to 1 according to Census Bureau data, and sales incentives have risen in recent months as high interest rates dampen demand.COASTAL SHIFTRyan Peterson, founder and CEO of logistics platform Flexport, said that with Baltimore handling only 1.1 million twenty-foot equivalent containers last year – ranking 12th in the U.S., any impact on container rates and shipping costs from the disruption would be far less than increases caused by cargoes diverted from the Suez Canal because of attacks on Red Sea shipping by the Houthi militant group in Yemen.But the port outage could contribute to a shift of container traffic to West Coast U.S. ports that was already underway over the past several months because of the lack Asian shippers’ access to the Suez route and reduced capacity in the Panama Canal due to low water levels. Peterson said the potential for an East Coast longshoreman strike in late September – at the height of Christmas-season imports – also has some shippers considering West Coast shipments. “East Coast volumes are down and there is the ability for those ports to flex up to handle this,” he said of the Baltimore disruption, adding that it’s “one more reason to think to start shifting volumes to the West Coast instead of the East.” More

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    ECB policy would be very restrictive even after rate cut – Cipollone

    BRUSSELS (Reuters) – The European Central Bank’s monetary policy would remain “very restrictive” even after an interest rate cut, ECB board member Piero Cipollone said on Wednesday.”We’re so far away from a neutral stance of monetary policy that even if we adjust, we are still very restrictive,” Cipollone told an event in Brussels. More

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    China’s President Xi meets US executives in Beijing as investment wanes

    BEIJING (Reuters) -China’s President Xi Jinping met American business leaders at the Great Hall of the People in Beijing on Wednesday, as the government tries to woo back foreign investors and international firms seeking reassurance about the impact of new regulations.Beijing wants to boost growth of the world’s second largest economy after foreign direct investment shrank 8% in 2023 amid heightened investor concern over an anti-espionage law, exit bans as well as raids on consultancies and due diligence firms.Xi’s increasing focus on national security has left many companies uncertain where they might step over the line, even as Chinese leaders make public overtures towards foreign investors.”China’s development has gone through all sorts of difficulties and challenges to get to where it is today,” Xi said, according to state media.”In the past, (China) did not collapse because of a ‘China collapse theory’ and it will also not peak now because of a ‘China peak theory,'” he added.Stephen Schwarzman, co-founder and CEO of private equity firm Blackstone (NYSE:BX), Raj Subramaniam, head of American delivery giant FedEx (NYSE:FDX), and Cristiano Amon, the boss of chips manufacturer Qualcomm (NASDAQ:QCOM) were part of the around 20-strong all-male U.S. contingent. The audience with Xi – organised by the National Committee on U.S.-China Relations, the U.S.-China Business Council and the Asia Society think tank – lasted around 90 minutes, according to a person with direct knowledge of the matter.The source, who declined to be named as they were not authorised to speak to the media, had no immediate comment on what was discussed and the three organisations did not immediately respond to requests for comment on the meeting.The U.S. and China are gradually resuming engagements after relations between the two economic superpowers sank to their lowest in years due to clashes over trade policies, the future of democratically ruled Taiwan and territorial claims in the South China Sea.The gathering took place in the East Hall of the Great Hall of the People, which is reserved for important functions. Attendees sat in a square formation around a large red, orange and green floral installation, a video released by state media showed. Commerce minister Wang Wentao, top diplomat Wang Yi and the head of China’s state planner, Zheng Shanjie, sat alongside Xi.The audience with Xi comes after Chinese Premier Li Qiang did not hold a meeting with visiting foreign CEOs at the China Development Forum in Beijing on March 24-25. The chance to exchange views with Beijing’s second-ranking leader was a key element of the summit in previous years.Wednesday’s meeting followed on from a dinner in November with U.S. executives in San Francisco, where Xi received a standing ovation. More

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    Euro zone wage data support rate cut case, says ECB’s Cipollone

    The ECB has flagged a possible rate cut for June depending on further good news on wages and the comments from Cipollone, in his first major policy address since joining the board, suggest the process was heading in the right direction. “Wage growth appears on track to gradually moderate in the medium term towards levels that are consistent with our inflation target and productivity growth, in line with the projections,” Cipollone told an event in Brussels.”As our confidence in the timely convergence of inflation to our target grows, it also strengthens the case for adjusting our policy rates,” Cipollone said. Investors now expect the ECB to cut rates in June but they are split on whether two or three more moves would come before the end of this year. The bank has placed an oversized emphasis on first quarter wage data, due out in late May, suggesting that the rate path is unlikely to be clear for some time yet.Compensation per employee declined to 4.6% in the fourth quarter from 5.1% three months earlier but remains well above the 3% level the ECB considers to be in harmony with 2% inflation. Still, Cipollone cautioned against excessive focus on short-term wage developments, arguing that a recovery in household earnings was necessary and even after such a catch up, real wages would still be below levels justified by labour productivity growth since the pandemic.”Excessive focus on short-term wage developments may not take into full consideration the recovery in wages that can – and needs to – take place for the euro area’s currently fragile recovery to gain a stronger footing,” he said. He added economic uncertainty has receded so the ECB is also becoming more confident in its own projections, which show a continued slowdown in inflation with the target hit next year. More

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    US futures, GameStop, falling yen – what’s moving markets

    U.S. stock futures traded higher Wednesday, rebounding after a recent pullback, as investors await further cues on the Federal Reserve’s interest rate trajectory.By 05:00 ET (09:00 GMT), the Dow futures contract was 180 points, or 0.5%, higher, S&P 500 futures gained 24 points, or 0.5%, and Nasdaq 100 futures rose by 90 points, or 0.5%.The major indices closed with minor losses Tuesday, the third negative trading day in a row in the case of the broad-based S&P 500 index, but the three averages are still on pace to end the trading month and quarter, which both conclude with Thursday’s closing bell, higher.There is little in the way of U.S. economic data to digest later Wednesday, and trading ranges are likely to be limited ahead of Friday’s release of the Fed’s favorite inflation gauge, the core personal consumption expenditures price index.Federal Reserve Governor Christopher Waller is due to speak later in the session, and investors will be studying his comments on future monetary policy.GameStop (NYSE:GME) stock slumped premarket after the troubled video game retailer reported disappointing fourth-quarter earnings amid softer sales over the important holiday period.At 05:00 ET, GameStop fell 15% premarket, set to add to the near 12% losses year-to-date.Net sales fell by about 24% in the fourth quarter from a year earlier, driven by a nearly 30% slump in its software business, of which gaming software, digital software and PC entertainment software makes up about a quarter of overall revenue.The company responded to these weak numbers by saying it had cut an unspecified number of jobs to reduce costs.”An increasing mix of digital downloads is hurting physical retail, and there is simply no reason to go to the store if a consumer can just order a game and download it immediately,” Wedbush Securities analyst Michael Pachter said, in a note.”Revenues are highly unlikely to rebound unless management figures out a way to drive store traffic.”The Bank of Japan raised interest rates earlier this month for the first time since 2007, but this has done little to support the yen, which fell to its weakest level against the U.S. dollar since 1990 earlier Wednesday.At 05:00 ET, USD/JPY traded marginally lower at 151.50 having earlier in the session climbed as high as 151.97.The BOJ’s landmark exit from negative interest rates had been highly anticipated, and thus largely priced in, and the Japanese central bank has continued to stress the need for an accommodative monetary policy for the time being.  The yen is the lowest-yielding G10 currency, making it ideal for carry trades, and investors who had trimmed such trades before the BOJ meeting, as well as other central bank gatherings, have been rebuilding their positions.With the BOJ unlikely to hike again soon, officials have resorted to intervention threats to try and stem the yen’s fall.Japan’s finance minister warned, earlier Wednesday, of “decisive steps” to tame “disorderly” moves, echoing his comments before the central bank intervened in late 2022 to prop up the yen.Bitcoin has seen a dramatic recovery from its 2022 lows, including strong gains this year, but this has resulted in massive losses for short sellers of crypto-related stocks, according to data compiled by S3 Partners.The world’s biggest cryptocurrency has recorded a nearly five-fold recovery from 2022 lows when Bitcoin fell as low as $15,000, gaining over 60% this year so far, and recently clocked record highs of over $73,000. These recent gains were largely driven by the U.S. approval of exchange-traded funds that directly track the token’s price.However, this recovery has led to nearly $1.9 billion in mark-to-market losses for short sellers of crypto-related stocks, S3 Partners revealed this week.The total short interest in crypto-related stocks stands at $10.7 billion, with MicroStrategy (NASDAQ:MSTR) and Coinbase (NASDAQ:COIN) Global account for 84% of this short interest, short-sellers of MicroStrategy, the world’s largest corporate holder of Bitcoin, leading the downturn with $1.4 billion in mark-to-market losses.Despite Bitcoin’s bullish run, the total short interest in the sector has increased by $3.67 billion to $10.71 billion in 2024, suggesting continued skepticism or strategic hedging by short sellers. Oil prices fell sharply Wednesday after the release of industry data showing a hefty increase in U.S. inventories. By 05:00 ET, the U.S. crude futures traded 1.2% lower at $80.66 a barrel, while the Brent contract dropped 1.1% to $84.67 per barrel.Data from the American Petroleum Institute, released Tuesday, showed that U.S. crude inventories saw a build of 9.3 million barrels in the week to March 22, substantially above expectations for a draw of 1.2 million barrels. The official U.S. inventory data, from the Energy Information Administration, is due later Wednesday, but the API reading has raised questions over just how tight U.S. crude markets were, especially as oil production remained at record highs of over 13 million barrels per day. Expectations of tighter global oil supplies- following Russian supply curbs, geopolitical disruptions in the Middle East and increased U.S. refinery activity- powered oil prices to four-month highs earlier in March.    More

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    They Grow Your Berries and Peaches, but Often Lack One Item: Insurance

    Farmers of fruits and vegetables say coverage has become unavailable or unaffordable as drought and floods increasingly threaten their crops.Farmers who grow fresh fruits and vegetables are often finding crop insurance prohibitively expensive — or even unavailable — as climate change escalates the likelihood of drought and floods capable of decimating harvests.Their predicament has left some small farmers questioning their future on the land.Efforts to increase the availability and affordability of crop insurance are being considered in Congress as part of the next farm bill, but divisions between the interests of big and small farmers loom over the debate.The threat to farms from climate change is not hypothetical. A 2021 study from researchers at Stanford University found that rising temperatures were responsible for 19 percent of the $27 billion in crop insurance payouts from 1991 to 2017 and concluded that additional warming substantially increases the likelihood of future crop losses.About 85 percent of the nation’s commodity crops — which include row crops like corn, soybeans and wheat — are insured, according to the National Sustainable Agriculture Coalition, a nonprofit promoting environmentally friendly food production.In contrast, barely half the land devoted to specialty crops — supermarket staples like strawberries, apples, asparagus and peaches — was insured in 2022, federal statistics show.Among those going without insurance is Bernie Smiarowski, who farms potatoes on 700 acres in western Massachusetts, along with 12 acres for strawberries. His soil is considered some of the nation’s most fertile. The trade-off is the proximity to the Connecticut River, a bargain that grows more tenuous as a warming world heightens the likelihood of flooding.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More