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House passes bipartisan infrastructure bill, sends it to Biden



Sunrise hits the U.S. Capitol dome on September 30, 2021 in Washington, DC. Congress is facing a partial federal government shutdown at midnight if the House and Senate can not pass an extension of the current budget.

Chip Somodevilla | Getty Images News | Getty Images

The House passed a more than $1 trillion bipartisan infrastructure bill late Friday, sending it to President Joe Biden’s desk in a critical step toward enacting sprawling Democratic economic plans.

The Senate approved the revamp of transportation, utilities and broadband in August. The legislation’s passage is perhaps the unified Democratic government’s most concrete achievement since it approved a $1.9 trillion coronavirus relief package in the spring.

The measure passed in a 228-206 vote. Thirteen Republicans supported it, while six Democrats voted against it. Biden could sign the bill within days.

Washington has tried and failed for years to pass a major bill to upgrade critical transportation and utility infrastructure, which has come under more pressure from extreme weather. The White House has also contended passage of the bill can help to get goods moving as supply-chain obstacles contribute to higher prices for American consumers.

The vote Friday followed a day of wrangling over how enact the two planks of the party’s agenda. The push-and-pull exemplified party leaders’ months long struggle to get progressives and centrists who have differing visions of the government’s role in the economy behind the same bills.

Democrats entered the day planning to pass both the infrastructure legislation and the party’s larger $1.75 trillion social safety net and climate package. A demand from a handful of centrists to see a Congressional Budget Office estimate of the social spending plan’s budgetary effects delayed its approval. Progressives sought assurances the holdouts would support the bigger proposal if they voted for the infrastructure bill.

After hours of talks and a Biden call into a progressive caucus meeting urging lawmakers to back the infrastructure bill the party’s liberal wing got assurances from centrists that they would support the larger package. The social and climate plan then cleared a key procedural hurdle early Saturday morning.

Congressional Progressive Caucus Chair Rep. Pramila Jayapal, D-Wash., said the group reached a deal to back the infrastructure plan in exchange for a commitment to take up the safety-net bill “no later than the week of November 15.” A group of five centrists separately issued a statement saying they would back the Build Back Better legislation pending a CBO score that assuages their concerns about long-term budget deficits.

In a statement after the House vote, Biden said the legislation would “create millions of jobs, turn the climate crisis into an opportunity, and put us on a path to win the economic competition for the 21st Century.” He also noted that the procedural vote on the second Democratic bill will “allow for passage of my Build Back Better Act in the House of Representatives the week of November 15th.”

The House is out of Washington next week, and it could take the CBO days or weeks to prepare a score of the legislation.

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The bills together make up the core of Biden’s domestic agenda. Democrats see the plans as complementary pieces designed to boost the economy, jolt the job market, provide a layer of insurance to working families and curb climate change.

Biden and Democrats have looked for a signature achievement they can point to on the 2022 midterm campaign trail as the president’s approval ratings flag. Biden will welcome Friday’s developments, as House passage of the bill followed a strong October jobs report and approval of Pfizer’s Covid vaccine for 5-to-11-year-olds in the U.S.

While Biden could sign the infrastructure bill soon, the safety net and climate package will likely take weeks longer.

The House will have to wait for a CBO score. The Senate may pass a different version of the plan, which would require another House vote. Senate Majority Leader Chuck Schumer has set a Thanksgiving target to pass the larger Democratic bill.

The bipartisan Infrastructure Investment and Jobs Act would put $550 billion in new money into transportation projects, the utility grid and broadband. The package includes $110 billion for roads, bridges and other major projects, along with $66 billion for passenger and freight rail and $39 billion for public transit.

It would put $65 billion into broadband, a priority for many lawmakers after the coronavirus pandemic highlighted inequities in internet access for households and students across the country. The legislation would also invest $55 billion into water systems, including efforts to replace lead pipes.

Before the vote, Transportation Secretary Pete Buttigieg told MSNBC that “the moment the president signs this, then it’s over to our department on the transportation pieces to get out there and deliver.” It can take years to complete major projects after Congress funds them.

Republicans helped to write the bill in the Senate, and it garnered 19 GOP votes in the chamber. A range of congressional Republicans opposed the plan because they considered it too closely tied to Democrats’ larger proposal, which they are passing without Republicans through the budget reconciliation process.

Many Democrats considered the infrastructure bill inadequate because it did not address issues including child care, pre-K education, Medicare expansion and the enhanced child tax credit. Those policies, priorities for Biden and top Democrats, made it into the House version of the social safety net bill.

Democratic leaders tied the proposals together in an effort to keep centrists and progressives on board with both plans. A thorny legislative process has unfolded for months as Democrats try to get disparate groups with varied visions of the federal government’s role in the economy to back both packages.

The chaos Friday was only the latest stumble in the process to approve the bills.

“Well, the whole day was a clusterf***, right,” progressive Rep. Mark Pocan, D-Wisc., said Friday night.

Still, he said lawmakers worked in a “congenial” way to try to reach a solution.

Many Democrats will be relieved to have one bill passed after a chaotic day and an achievement that has eluded Washington for years.

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Oil drops 13% in worst day of 2021, breaks below $70 as new Covid variant sparks global demand concerns



Working oil pumps against a sunset sky.

Imaginima | E+ | Getty Images

Oil posted its worst day of the year on Friday, tumbling to the lowest level in more than two months as the new Covid-19 strain sparked fears about a demand slowdown just as supply increases.

The leg lower came amid a broad sell-off in the market with the Dow dropping more than 900 points. The World Health Organization warned Thursday of a new Covid variant detected in South Africa. It could be more resistant to vaccines thanks to its mutations, although the WHO said further investigation is needed.

U.S. oil settled 13.06%, or $10.24, lower at $68.15 per barrel, falling below the key $70 level. It was the contract’s worst day since April 2020. WTI also closed below its 200-day moving average a key technical indicator for the first time since November 2020.

International benchmark Brent crude futures slid 11.55% to settle at $72.72 per barrel.

Both contracts registered their fifth straight week of losses for the longest weekly losing streak since March 2020.

A decrease in travel and potential new lockdowns, both of which could hit demand, come just as supply is about to increase.

“It appears that the discovery of a Covid-19 variant in southern Africa is spooking markets across the board. Germany is already limiting travel from several nations in the affected region,” said John Kilduff, partner at Again Capital. “The last thing that the oil complex needs is another threat to the air travel recovery,” he added.

On Tuesday the Biden Administration announced plans to release 50 million barrels of oil from the Strategic Petroleum Reserve. The move is part of a global effort by energy-consuming nations to calm 2021s rapid rise in fuel prices. India, China, Japan, South Korea and the U.K. will also release some of their reserves.

“This [the sell-off] is attributable to concerns about a sizeable oversupply in early 2022 that is set to be brought about by the upcoming release of strategic oil reserves in the US and other major consumer countries, plus the ongoing steep rise in new coronavirus cases,” noted analysts at Commerzbank. “Furthermore, an even more transmissible variant of the virus has been discovered in South Africa, prompting a noticeable increase in risk aversion on the financial markets today.”

OPEC and its oil-producing allies are set to meet on Dec. 2 to discuss production policy for January and beyond. The group has slowly eased the historic output cuts it agreed to in April 2020 as the coronavirus sapped demand for petroleum products. Since August the group, known as OPEC+, has returned 400,000 barrels per day to the market each month.

The group has maintained its gradual taper despite calls from the White House and others to hike output as oil prices surged to multi-year highs. West Texas Intermediate crude futures hit a seven-year high in October, while Brent rose to a three-year high.

U.S. oil is now down more than $15 since its October high of $85.41.

“The coordinated SPR release is getting a second look, as well, especially with OPEC decrying it and asserting that the release will tip the global market back into surplus. The release is much more than just a drop in the bucket,” added Kilduff.

Energy stocks followed oil lower on Friday, and the group was the worst-performing S&P 500 sector, falling more than 4%. Devon Energy, APA and Occidental were among the biggest losers.

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Cybersecurity ETFs to consider amidst increasing threat from Internet crimes



Cybersecurity ETFs, Internet crimes, Cyber ETFs, thematic ETFs, First Trusts CIBR, ETFMG Prime Cyber Security ETF HACKCybersecurity ETFs, Internet crimes, Cyber ETFs, thematic ETFs, First Trusts CIBR, ETFMG Prime Cyber Security ETF HACKThe largest cyber ETF, First Trusts CIBR (CIBR) trades around $45 million per day.

Investing in the stocks of a specific industry or a particular theme may be highly rewarding, but can be an equally risky proposition. The volatility in such stocks may be high in the short to medium term as they are more prone to the news flow impacting their fortunes. One is related to cyber security and those looking to invest in the stocks of companies in the sector may consider buying cybersecurity-related exchange-traded funds (ETFs). Cyber security ETFs are expected to thrive in the virus-hit economy worldwide.

According to the Internet Crime Complaint Center (IC3), a record number of complaints from the American public in 2020: 791,790 were received, with reported losses exceeding $4.1 billion. This represents a 69% increase in total complaints from 2019.

Cyber ETFs are thematic ETFs giving investors an access to a diversified basket of stocks with exposure to a specific investment or economic theme.

The largest cyber ETF, First Trusts CIBR (CIBR), which tracks an index jointly created by Nasdaq and the Consumer Technology Association (CTA) trades around $45 million per day and has a total AUM of over $4.8 billion.

The ETFMG Prime Cyber Security ETF (HACK) is the other ETF that has a portfolio of companies providing cyber security solutions that include hardware, software and services.

Recently, in a report on the Nasdaq website, Phil Mackintosh takes a deep dive into the cybersecurity ETFs. Here are some excerpts:

As far as the growth and the potential is concerned, the report says – Its probably not surprising that cyber ETFs have seen strong growth, as data shows that cybercrime is increasing, and with that, losses from companies affected by breaches are also growing. Furthermore, other studies show that not only is the global cybersecurity market growing but also that a majority of Chief Information Officers are prioritizing cybersecurity spending for this year, with 61% of the more than 2,000 CIOs surveyed increasing investment in cyber/information security in 2021. This positions cyber as an industry with potential long-term growth and persistent recurring revenues.

A look at the performance shows that more recently (during the pandemic), CIBR has started to outperform the broader market. The study also found that Nasdaqs Cyber Index outperforms the broader market when data breaches occur.

The threat of cyber crimes doesn’t look to fade away in a hurry and as the world goes more digital, the need and demand for newer cyber security products will rise. Some portion of your portfolio may be considered in Cyber ETFs keeping your risk profile in context.

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Sticker shock could change retailers’ approach to sales



Shoppers looking at Macy’s Black Friday specials in Maumee, Ohio, November 27, 2020.

Stephen Zenner | SOPA Images | LightRocket | Getty Images

Keith Fitzgerald has gone to extreme lengths this holiday season to make sure he gets the perfect gift.

Fitzgerald, a 40-year-old hairstylist, searched online and at stores for a special edition Lego: a nearly 4,000-piece set that resembles the house in the Christmas classic, “Home Alone” complete with booby traps and a zipline to the backyard treehouse. He knew the $250 set would delight his boyfriend on the final night of Hanukkah.

Yet when he logged onto the Lego website, the set was sold out. No nearby stores had any in stock. He reached out to family and friends across the country and enlisted the help of a friend who stood in line at a New York City store, bought it for him and agreed to mail the giant box to his home that’s near Richmond, Virginia.

“The shipping, that’s a little extra, but he’s worth it,” Fitzgerald said.

Consumers’ huge appetite to spend and the global supply chain crunch are colliding this holiday season. For shoppers, that is making some desired toys, clothes and other items hard-to-find, even as retailers like Walmart and Target say there will be plenty of merchandise to choose from on shelves. It is also driving up prices and flipping the script for shoppers who used to get motivated by a deal.

U.S. consumers will see smaller discounts across all major gifting categories, according to Adobe Analytics, which tracks retailers’ websites. Electronics, for instance, are expected to peak at 22% discounts during the holiday season versus 27% in 2020. Discounts on toys will peak at 16% compared with 19% a year ago. And apparel will peak at 15% instead of 20% in 2020, the company projected.

Shoppers will still see the biggest discounts around key retail holidays, Thanksgiving, Black Friday and Cyber Monday, according to Adobe. Even those prices won’t be as low, though. On average, it estimated shoppers will pay 9% more during Cyber Week compared with a year ago, Adobe said.

‘Lucky it’s there on the shelf’

With consumer demand so high and inventory of some items low, some retailers have found themselves with the upper hand. Shares of Macy’s and Kohl’s rose after the retailers reported quarterly results that benefited from lean inventory and few markdowns.

On third-quarter earnings calls, leaders of the department stores said that they have been able to pass on higher costs from shipping and cut back on huge price cuts when selling clothes, shoes and home goods. Fewer items are also winding up on the department stores’ clearance racks, too. That is resulting in higher profits.

Luc Wathieu, a professor of marketing at Georgetown University’s McDonough School of Business, said retailers don’t need to dangle discounts in the same way this holiday. In fact, he said, retailers would be silly to do so. Fear of not finding a much-wanted item is enough motivation for people to rush to the store or a retailer’s website and to get them to pay more.

Retailers no longer need to message to shoppers the same way with sales, he said.

“They tell them ‘Look, the toy you want to give your kid may not be there later,'” he said. “‘Shop early. Don’t go for the discounts. You’re already lucky it’s there on the shelf.'”

Retraining shoppers

For retailers, a shift away from dramatically slashed prices and going head-to-head with competitors on price alone could create an opportunity, said Katie Thomas, lead for the Kearney Consumer Institute. In the short term, companies can pass on inflated costs of materials and shipping and have fewer items that get marked down and added to the clearance rack.

Over the long term, she said, it could provide a chance to retrain American shoppers who have long been hooked on deals.

“Other countries do not discount like we do,” she said. “We’ve trained American consumers to just wait for everything to be on deal.”

That could have big implications for companies’ operating margins and could drive up profits.

She said retailers can test and learn how to price appropriately or stand out in other ways. For instance, direct-to-consumer companies, such as luggage company Away and apparel seller Everlane, rarely discount and tout their exclusive products or customer service instead. Some like Apple have such a loyal fan following that people will stand in line for hours just to buy an item at full price.

“I think of it from the simplest consumer point of view, which is ‘If everybody is waiting to buy everything on deal, then you’re just not priced right or your quality is not good enough,'” she said.

Macy’s CEO Jeff Gennette said in an interview that the department store has tested its pricing approach. It has learned there’s a “price ceiling” for commodity items such as a basic T-shirt or a pair of denim jeans but not as much on a fashion-forward top.

Other retailers have spoken about seeing less price-sensitive shoppers, too.

Tapestry, which owns Coach, Kate Spade and Stuart Weitzman, has noticed customers are more willing to pay for handbags, even when the products are full price. The company’s CEOJoanne Crevoiserat said style, not just low price, is inspiring customers to buy.

“We’re seeing little price resistance,” she said in an interview. “And you know, I think that’s a signal that our brands have pricing power.”

And Newell Brands, the owner of home brands like Calphalon, said consumers have been buying premium versions of cookware and even food storage, according to Kris Malkoski, the company’s CEO of home solutions.

The question, however, is whether that willingness to splurge is a short-term change to consumer mindset or a lasting shift in people buying the goods they want, with less of a focus on price.

Walmart and Target have swung the other direction, vowing to hold down price and emphasize value in an inflationary environment.

Holiday sales are expected to hit a record of between $843.4 billion and $859 billion of sales, which represents an increase of 8.5% to 10.5%, according to the National Retail Federation.

Thomas said if holiday sales meet or exceed those expectations even during a period when inflation has hit a more than 30-year high retailers may feel emboldened to keep prices higher in the future.

Fitzgerald, who bought the Lego set, said he has seen supply chain challenges play out in recent months. At his hair salon, some hair colors, shampoos and other items have been backordered. He struggled to find a shower curtain liner at the store recently when getting ready host an out-of-town guest.

He said he was thrilled to find the Home Alone Lego set and is eager to give it to his boyfriend, Will. It is their first holiday season together and this year, they plan to get engaged. That made the high price and hassle of getting the set mailed by a friend to Virginia worthwhile, he said.

“I laid the groundwork to tell him that he wasn’t getting it,” he said. “So I think he’ll be really surprised. I don’t think I’ll always be able to surprise him this much, but we’re getting engaged this year and it’s our first big holiday season together, so I wanted to make sure it was going to be a memorable holiday season from beginning to end.”

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