Good morning. Here’s your Daily Situational Awareness for Tuesday, 06 July 2021.
- Congress to try passing $4T spending before August recess
- Trucking shortage continues, likely to persist through fall and winter
- OPEC crisis sends oil higher, $100/bbl still in sight
- Rent prices could rise another 10% this year
- Hazards Warning
CONGRESS: Legislators are back in their home districts until 20 July. Upon returning, negotiations will continue on police reform and infrastructure bills. Democrats seek a combined $4 trillion in infrastructure spending, and want to make substantial changes to national law enforcement procedures. The goal is to finalize negotiations and pass legislation before the August recess, which lasts the entire month. Any legislative progress will occur through party-line votes and budget reconciliation. – D.M.
GRIDLOCK: The national shortage of truckers continues. The latest impact is to the furniture industry due to their unique packaging and handling requirements from factory to retail. Delivery delays are up 700% compared to 2020. The manufacturing and supply-side tensions are easing for some manufacturers, but they’re unable to realize the recovery as storage spaces and rented warehouses continue to fill up. The logistics backlog is likely to remain through the fall and winter. – D.M.
FUEL: Failed negotiations at Organization of Petroleum Exporting Countries (OPEC) drove oil prices higher over the weekend as the UAE announced it won’t increase oil production. While West Texas Intermediate Crude sits around $75/barrel, we previously reported on traders buying up call options for $100 oil by the end of next year. Higher oil prices will lead to higher consumer prices all around. – D.M.
RENT: Median national rent is up 9.2% year to date, while New York Federal Reserve data shows that rent prices may rise another 7-10% over the next 12 months. Since rent prices rarely come down, this is another indicator that inflation won’t be merely “transitory” as the Federal Reserve announced earlier this year. – M.S.
HURRICANE SEASON: Tropical Storm Elsa is expected to make landfall within the next 12 hours and should move through the southeast by Friday. Be advised of secondary impacts to roads as sustained heavy rains degrade their condition quickly. Check your local weather for localized warnings.
In today’s Early Warning brief, Mike provides recommendations ahead of crisis or conflict with China, and Max provides a roll-up of Far Left violence from over the weekend. Become an Early Warning subscriber and read the full report here: https://forwardobserver.com/subscribe