Current Events in June 2020

General Motors is said to have started an electric van program in an effort to get ahead of Tesla, according to a new report from Reuters. 

Although Tesla hasn’t announced plans to develop a commercial electric van, GM is reportedly aiming to preemptively head off competition from the electric automaker.

Sources familiar with the company’s plan told Reuters that GM is “developing an electric van aimed at business users, joining a growing list of carmakers planning EVs for the same segment.” 

Businesses such as Amazon and United Parcel Service Inc. would be among customers.

“Suppliers familiar with such plans at GM and Ford told Reuters the Detroit automakers, which count trucks and commercial vehicles among their most profitable businesses, ‘don’t want to leave the door open for Tesla’ as they did in consumer passenger cars,” the report said. 

GM hasn’t confirmed the plan

GM’s electric van is currently code-named BV1 and is slated to begin production in late 2021. It will be built using GM’s new Ultium battery platform, which will also be built into GM’s other future electric pickup trucks and SUVs.

Last November, Tesla CEO Elon Musk suggested in a tweet that his company was considering launching an all-electric work van. However, the automaker hasn’t announced definitive plans to build one. 

In a statement to the Detroit Free Press, a GM spokesperson said the company is “committed to an all-electric future and is implementing a multi-segment, scalable EV strategy to get there.” The spokesperson stopped short of confirming the report, adding that the company does not currently “have any announcements to make regarding electric commercial vehicles."

A new study conducted by researchers from the University of Colorado explored a possible pain relief option for pregnant women in labor. 

According to the researchers, consumers and their health care providers should consider utilizing nitrous oxide to ease the pain during the delivery process, as it is a safe course of treatment for both mothers and their babies. 

“While there is a fair body of anecdotal evidence of safety and effectiveness for how nitrous oxide affects pain during labor, few systematic analyses of outcome are available from U.S.-based cohorts,” said researcher Priscilla M. Nodine, PhD. 

Easing the pain during labor

To see how nitrous oxide can help ease the pain during labor and delivery, the researchers conducted a survey of over 460 women who had used it during labor. 

They were most interested in uncovering how effective nitrous oxide, which many refer to as laughing gas, was in reducing pain. They also wanted to see if any other pain relief options -- like an epidural -- were necessary during the labor process. 

Ultimately, over 30 percent of the women involved in the study used strictly nitrous oxide during their labor and delivery. The researchers explained that this course of treatment comes with hardly any side effects. 

Safety, for mothers and their babies, is of the utmost importance. Based on these findings, the researchers recommend that expectant mothers consider all of their pain relief options during labor.  

“Nitrous oxide is a useful, safe option for labor analgesia in the United States,” said Dr. Nodine. “Understanding predictors of conversion from inhaled nitrous oxide to other forms of analgesia may assist providers in their discussions with women about pain relief options during labor.” 

American Honda Motor Co. is recalling 136, 057 model year 2018-2019 Acura NSX, model year 2019 Acura RDX, RLX & RLX Sport Hybrid, model year 2018-2019 Honda Accord, Civic Hatchback, Civic Type R & HR-V, model year 2019-2020 Insight, and model year 2019 Fit vehicles.

The low-pressure fuel pump inside the fuel tank may fail.

If the fuel pump fails, the engine can stall while the vehicle is being driven, increasing the risk of a crash.

What to do

Honda will notify owners, and dealers will replace the fuel pump assembly free of charge.

The manufacturer has not yet provided a notification schedule.

Owners may contact Honda customer service at (888) 234-2138.

Coronavirus (COVID-19) tally as compiled by Johns Hopkins University. (Previous numbers in parentheses.)

Total U.S. confirmed cases: 1,835,681 (1,812,742)

Total U.S. deaths: 106,312 (105,262)

Total global cases:6,425,284 (6,309,107)

Total global deaths: 381,528 (376,445)

Fauci: Vaccine may provide limited immunity

Dr. Anthony Fauci, a key White House health adviser, has raised questions about how long a vaccine against the coronavirus (COVID-19) might protect someone from getting sick. In an interview with the Journal of the American Medical Association (JAMA), Fauci said it’s possible any vaccine might only provide temporary protection.

“When you look at the history of coronaviruses, the common coronaviruses that cause the common cold, the reports in the literature are that the durability of immunity that’s protective ranges from three to six months to almost always less than a year,” Fauci said. “That’s not a lot of durability and protection.” 

The National Institute of Allergy and Infectious Diseases (NIAID), the agency Fauci leads, has been collaborating on a vaccine candidate with Moderna.

Final curtain?

AMC, the nation’s largest chain of movie theaters, has struggled during the coronavirus shutdown. Now, looking to the future, the company says it isn’t sure it can survive as people social distance and stay away from large venues.

The company estimates it may have lost $2.1 billion to $2.4 billion in the first quarter that ended March 31. It revealed revenue was down $941.5 million, a nearly 22 percent drop from the $1.2 billion it earned in the same quarter last year. 

“We are generating effectively no revenue,” AMC said in a regulatory filing.

Social distancing in a protest ‘not practical’

Footage of protest gatherings in large cities show very little social distancing, and New York Mayor Bill de Blasio says he’s fine with that. At a briefing, he rejected a reporter’s assertion that if the city’s restrictions are waived for protest marches, it should also apply to church services.

“When you see a nation — an entire nation — grappling with an extraordinary crisis that’s deep-seated in 400 years of American racism,” de Blasio said during an hour-long press conference. “Sorry, that is not the same question as the understandably aggrieved store owner or the devout religious person who wants to go back to religious services.”

Former U.S. Food and Drug Administration (FDA) Commissioner Dr. Scott Gottlieb is among the health officials who have publicly worried that mass demonstrations where people are in close contact may cause a spike in coronavirus cases.

2.7 million jobs disappeared in May

An early look at May employment figures shows that the damage was deep, but not as deep as previously feared. In its monthly report on private payrolls, ADP revealed that the economy shed 2.7 million jobs last month.

The job losses occurred across the board in businesses of all sizes. Large companies with 1,000 or more employees lost the most jobs, at 1.3 million.

A more comprehensive view of the carnage in the job market comes Friday when the Labor Department releases its non-farm payroll report for May.

Report measures impact on spas, salons

Beauty parlors and nail salons are among some of the hardest-hit businesses during the coronavirus, and a new report measures just how deep the damage goes.

A report by The Business Research Company says the personal care services industry is a hands-on industry, and the individuals involved are highly susceptible to the risk of transmission. This is discouraging people from accessing beauty services. 

In addition to closings and disruptions to the supply chain, the report notes tjat self-isolating consumers have been relying on at-home products such as natural and home-made facials, lotions, and essential oils to take care of themselves. 

Around the nation

• Illinois: The state has loosened liquor regulations and is now allowing bars and restaurants to sell mixed drinks for delivery and pickup. The move is an outgrowth of shutdown orders that have kept patrons away. The measure passed overwhelmingly in both chambers of the legislature.

• Colorado: The state health department has announced changes to the way it reports deaths from the coronavirus. The changes were made to bring Colorado into alignment with the way the Centers for Disease Control and Prevention (CDC) prefers the deaths to be counted.

• Florida: Wild Florida, a wildlife attraction, hopes to provide some diversion for frontline workers. The recently reopened park has announced free admission for these workers from June 8-13, during “Gator Week.”

More than $120 billion of the $310 billion added to the amount of money available to small businesses under the Paycheck Protection Program is still untapped, according to CNBC. 

Unlike the first round of funding (from which over a million loans were disbursed in less than two weeks), the second round of funding -- which began April 27 -- hasn’t dwindled nearly as fast. The average loan amount has dropped to $114,000 since the first round of funding. Analysts say the decrease in demand suggests the money is reaching and helping small businesses. 

PPP restrictions 

In an interview with CNBC, Richard Hunt, president and CEO of the Consumer Bankers’ Association, said the fear of an audit may be stopping some small businesses from applying for funding. Other factors that may be driving down demand include enhanced unemployment, duplicative applications, and concern about complying with the law in order to have the loan forgiven. 

A report released recently by the Inspector General for the SBA suggested that tens of thousands of small businesses could face additional hurdles down the line when the debt stemming from the emergency funding needs to be repaid. 

The IG report found that the debt would need to be repaid within two years instead of the ten years allotted by lawmakers. Businesses that don’t repay the loan within two years would likely need to work out additional arrangements with their lender. 

“We found the formal guidance in the SBA’s Interim Final Rule did not align with the allowable use requirements for PPP loans,” SBA Inspector General Hannibal "Mike" Ware said in the report. “SBA’s guidance could result in an unintended burden to the borrowers.”

Reluctance to apply

To avoid repayment, Hunt said small business borrowers need to spend 75 percent of the loan on payroll and the remaining 25 percent on other expenses such as rent and utilities. The loan would need to be used within eight weeks of disbursement, among other rules.

“The fear factor is real,” Hunt said. “The 75/25 formula, maybe that was too high, and the rules are too complex.”

The Consumer Bankers’ Association (CBA) is pushing for Congress to forgive loans of less than $150,000 “in part to encourage small businesses to borrow and begin using the money,” according to CNBC.

The CBA said the move would save more than $7 billion and tens of millions of hours of paperwork. 

“This threshold would account for 85 percent of total PPP recipients, but less than 26 percent of PPP loan dollars. Lenders would continue to meet the PPP requirements provided by SBA for these loans, but the loan forgiveness process would be faster for these small businesses,” the CBA said in a letter. 

Google is facing a lawsuit accusing it of illegally violating the privacy of millions of users by tracking their use of the internet via browsers set to “private” browsing mode. The lawsuit filed Tuesday seeks at least $5 billion; $5,000 per user or three times actual damages, whichever is greater, according to Reuters. 

The proposed class action suit claims Google improperly collected location information, as well as information about what users are viewing online through plug-ins that included Google Ad Manager and Google Analytics. 

"Billions of times a day, Google causes computers around the world to report the real-time internet communications of hundreds of millions of people to Google," according to the complaint filed with the federal court in San Jose, California.

Privacy violation accusations

The suit is just the latest in a string of accusations accusing Google of invading user privacy. Last week, Arizona's attorney general filed a lawsuit against Google accusing the company of illegally collecting users’ location data and using it for advertising purposes. 

"While Google users are led to believe they can opt-out of location tracking, the company exploits other avenues to invade personal privacy," Attorney General Mark Brnovich said in a statement.

"It’s nearly impossible to stop Google from tracking your movements without your knowledge or consent," he added. "This is contrary to the Arizona Consumer Fraud Act and even the most innovative companies must operate within the law."

An article published by the Associated Press debunked Google’s claim that turning location history off means users aren’t tracked. The report found that Google collects location information from users with location history turned off via settings such as Web & App Activity. 

Last August, Google proposed a set of standards called the “Privacy Sandbox” that would strike a balance between protecting consumers’ privacy and allowing advertisers to continue showing targeted ads. The tech giant said it was interested in creating "a secure environment for personalization that also protects user privacy.” 

The higher they go, the further they fall. And, on Tuesday, Bitcoin investors found that out the hard way.

Just when the digital currency's trading was above $10,137 at 10:45 a.m. ET, inside of five minutes, the price fell to $9,298. At press time, Bitcoin had recovered a tad, up to $9,578. 

Analysts at Coinbase think the precipitous drop in value may have caught traders on the wrong side of the market; its value had moved past $10,000 on Monday and looked like it could eclipse $11,000.

“However, buyers once again failed to keep prices above the $10,000 mark. The cryptocurrency has struggled multiple times over the past 12 months or so to establish a strong base above $10,000,” analyzed Coinbase’s Omkar Godbole. “The retreat, however, is unlikely to deter investors, who believe in Bitcoin’s long-term value as a safe haven asset and a hedge against inflation,” he said.

Blame it on “HODLing”

Godbole points to the possibility of “HODLing” -- slang in the cryptocurrency community for holding the cryptocurrency rather than selling it -- as the reason behind Bitcoin’s skittishness.

HODLing is the "favorite mantra" of Bitcoin holders, and despite the rollercoaster of a ride the kingpin of cryptocurrency has been on over the last two months, its investors are HODling all they can. 

According to Glassnode, nearly 60 percent of Bitcoin’s supply hasn’t changed hands in over a year, a predictable cue that investors are holding their Bitcoins tightly to their chest hoping for another run up the value ladder. 

“(The) last time we saw these levels was right before the $BTC bull market of 2017,” when Bitcoin zoomed from $900 to $20,000,” Glassnode tweeted.

With Prime Day being pushed back due to the COVID-19 pandemic, Amazon has decided there’s another way to make some hay -- hold an invitation-only sale!

On Tuesday, the online retailer sent word to sellers that it’s hosting a “Fashion Summer Sale Event” -- with the working title of “Biggest Sale in the Sky” -- on Monday, June 22. However, Amazon is only offering participation in the event to sellers it chooses.

According to a document seen by CNBC, Amazon is leaving the length of the sale open-ended, but the expected length is seven to 10 days. 

Everybody wins

Amazon styled the event as a boost to the economy as the pandemic fades and a new normal emerges. “We are having the Biggest Summer Sale event to drive excitement and jump-start sales,” the notice states. “To drive customer engagement, we are asking for your participation.”

To make sure everyone -- the economy, the consumer, and the seller -- all win, the company is asking sellers to come up with deals that have discounts of at least 30 percent off by the end of the day Wednesday (June 3).

Things are still iffy at Amazon

With the pandemic continuing to play havoc with both warehouses and employees, Amazon is trying to find some new footing. Things are so unsettled at Amazon that it pushed its mammoth Prime Day back indefinitely. Company CFO Brian Olsavsky also told analysts recently that he couldn't predict when the platform's oft-flaunted one-day Prime shipping feature would resume. 

Since Amazon employees started kicking up dust about working conditions related to COVID-19, the company has tried to reverse that narrative. To that end, the company also announced on Tuesday that it is offering a new family care benefit to 650,000+ U.S. employees.

The new benefit will provide each employee a host of options ranging from 10 days of subsidized emergency backup child or adult care and a $25 per day co-pay for in-center childcare.

The two most expensive things the average consumer ever buys -- a house and a new car -- continued to get more expensive during the shutdown, even though the sales volume for both plummeted.

With most consumers starting to be confined to their homes in March, traffic and home showings were down considerably. Most new car dealerships were closed for all of April and most of May, so any sales were limited to online transactions. But that didn’t keep prices from going up.

The S&P CoreLogic Case-Shiller Indices, which track U.S. home prices, show that home prices continue to increase at a modest 4.4 percent rate in all areas of the U.S. during March as state after state ordered residents to stay inside.

Phoenix, Seattle, and Charlotte reported the highest year-over-year gains among the 19 cities in the survey. In March, Phoenix led the way with an 8.2 percent year-over-year price increase, followed by Seattle with a 6.9 percent increase and Charlotte with a 5.8 percent increase. 

Higher prices in 17 of 19 cities

Seventeen of the 19 cities reported higher price increases in the year ending March 2020 versus the year ending February 2020. Craig J. Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P Dow Jones Indices, says March’s home prices showed little impact from the economic shutdown.

“At a regional level, Phoenix retains the top spot for the tenth consecutive month, Lazzara said. “Prices were particularly strong in the West and Southeast, and comparatively weak in the Midwest and Northeast.”

Prices rose even though sales of existing homes fell 8.5 percent in March and plunged 17.8 percent in April. 

New car prices were up 4.3 percent in May

Prices of new cars have also continued to climb during the pandemic. Kelley Blue Book reports that the estimated average transaction price (ATP) for a light vehicle last month was $38,940, an increase of 4.3 percent over May 2019.

"Though new-car sales will be down significantly for the third month in a row, due to the COVID-19 pandemic, average transaction prices have actually strengthened over this period for several reasons," said Tim Fleming, an analyst for Kelley Blue Book. "Incentives, deferred payments, and low APR deals are helping consumers stretch out their monthly payments over longer terms. Inventory levels have tightened as the economic recovery has begun, but little new supply has arrived yet from the factories that restarted in May.”

Fleming also says the smaller number of consumers buying new cars in May chose more expensive vehicles. He notes that the share of pickup trucks spiked recently, reaching an all-time high in April. The price consumers paid for a full-size pickup truck rose 1.3 percent, while the cost of a midsize truck jumped 3 percent.

A new study conducted by researchers from Michigan Medicine explored how older consumers’ pre-COVID-19 habits regarding grocery shopping and eating at restaurants could change in the wake of the pandemic. 

Based on survey responses, the researchers recommended that older consumers prioritize healthy eating both during the pandemic and beyond. They also hope that older consumers understand their risk for infection and make healthy choices when grocery shopping in stores, eating out, or gathering with friends. 

“Public health guidance to avoid infection will continue to alter food-buying habits for many older people and those with health conditions, so further support for them may be needed to ensure healthy habits continue,” said researcher Julia Wolfson, PhD. “That could include more assistance with online ordering for no-contact pickup or delivery.” 

Making the safest choices

In conjunction with AARP, the researchers analyzed over 2,000 responses to the National Poll on Healthy Aging. All survey respondents were between the ages of 50 and 80. 

These responses were all recorded prior to the COVID-19 outbreak, and the survey assessed older consumers’ typical habits regarding grocery shopping, cooking, and restaurant outings. The study revealed that the majority of respondents opted to grocery shop in-store as opposed to using a delivery service, while 11 percent reported eating out at restaurants at least one time per week. 

However, most of the participants reported cooking most of their meals at home before the pandemic even started. This is promising information, as this means most older consumers were prepared to continue cooking for themselves amid restaurant closures and the cancellation of social gatherings. 

Restaurant openings and poor eating habits

With restrictions beginning to loosen, the researchers fear that restaurant openings will entice older consumers to not only take a break from cooking, but also indulge in unhealthy options. Prior to the pandemic, a good portion of the participants had confidence in their healthy eating habits; however, the researchers fear that some of that diligence will fall to the wayside when letting someone else do the cooking. 

“As restaurants begin to reopen for dining or carry-out, the less-healthy options may beckon for those who have been cooking almost entirely at home,” said researcher Cindy Leung. “Restaurants could support healthy eating by making sure affordable healthy options are available on menus and making sure nutrition information is transparent and easily available.” 

These unhealthy eating habits were most concerning for those who lived alone, as 25 percent of the study participants reported eating all of their meals by themselves. The researchers hope that as small social gatherings start to crop up again, healthy eating will be a priority, as it could greatly benefit older consumers’ overall health. 

“As people begin to have small gatherings, social isolation might ease for those who have been living and eating alone all spring,” said researcher Dr. Preeti Malani. “But as friends and family cautiously begin to gather with older adults, we should do so with a focus not just on preventing infection, but also on supporting healthier eating habits for everyone.” 

Hearing loss affects countless consumers as they enter into older age, and previous studies have warned about how the condition can lead to premature death.

Now, researchers from University College London have found that a gene in fruit flies could be the key to treating hearing loss for older consumers. Because of how similar fruit flies’ auditory processing is to humans, these advances could greatly benefit consumers with hearing loss. 

“While many studies have been conducted into the hearing function of fruit flies, ours is the first to look at the mechanistic and molecular detail of their auditory life course,” said researcher Joerg Albert. 

“Our twin discoveries that fruit flies experience age-related hearing loss and that their prior auditory health is controlled by a particular set of genes, is a significant breakthrough. The fact that these genes are conserved in humans will also help to focus future clinical research in humans and thereby accelerate the discovery of novel pharmacological or gene-therapeutic strategies.” 

Treating hearing loss

Fruit flies were chosen for the study because of how similar they are biologically to humans. During this study, the researchers found that fruit flies experience hearing loss as they age much in the same way that humans do. 

In learning that, the next portion of the study involved the researchers retracing their steps. They sought to discover if there was any genetic indicator that could have prompted them to know that hearing loss was likely in the fruit flies. 

They discovered that the fruit flies had homeostasis genes, which are often responsible for picking up on sound and overall sensitivity in the ear. Knowing that, the researchers then got to work altering the gene expression, by making the genes either more or less prominent in the fruit flies, to determine if that affected their hearing loss. 

Ultimately, the researchers learned that manipulating the genes in this way was helpful in treating hearing loss for the fruit flies. Their findings from this study could help spur future treatment plans, and they could be the key to improving hearing loss treatment in the future. 

“Based on our findings from [the fruit flies], we have already started a follow-up drug discovery project designed to fast-track novel treatments for human [age-related hearing loss],” Albert explained.

Mortgage rates have plunged since the start of 2020, and they fell again to another record low last week, according to the Mortgage Bankers Association (MBA).

At the same time, demand for mortgages to purchase a home spiked, rising 5 percent from the previous week and 18 percent over the same week in 2019.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $510,400 or less fell to 3.37 percent from 3.42 percent, with points decreasing to 0.30 from 0.33 for loans with a 20 percent down payment. The effective rate decreased from last week. 

At the same time, the average 30-year fixed-rate FHA mortgage went up slightly, to 3.46 percent from 3.41 percent the previous week.

Mortgage rates have fallen from 4.68 percent in January 2019. They’ve gone down in part because the yield on Treasury bonds fell consistently during that period, settling at 0.72 percent.

Surprising number

The report’s biggest surprise was the number of new applications for mortgages to buy homes. Overall, applications were down slightly because fewer homeowners were refinancing mortgages.

But applications for loans to purchase homes soared in the last week of May. It coincided with the lifting of some coronavirus (COVID-19) restrictions in several states.

"The pent-up demand from homebuyers returning to the market continues to support a recovery from the weekly declines observed earlier this spring," said Joel Kan, MBA's associate vice president of Economic and Industry Forecasting. "However, there are still many households affected by the widespread job losses and the current economic downturn. High unemployment and low housing supply may restrain a more meaningful rebound in purchase applications in the coming months."

Predicted bounce back

The National Association of Realtor (NAR) had predicted a bounce back in home sales after activity virtually disappeared in April and most of May. 

“The economic lockdowns – occurring from mid-March through April in most states – have temporarily disrupted home sales,” said Lawrence Yun, NAR’s chief economist. “But the listings that are on the market are still attracting buyers and boosting home prices.”

NAR reported that April’s decline in existing-home sales -- down 22 percent -- was the largest month-over-month drop since July 2010.

Yun said he expects record-low mortgage rates to remain in place for the rest of the year. He also predicts that potential home sellers waiting out the pandemic will list their homes for sale by late summer, helping to alleviate low inventory levels.

General Motors is recalling 19 model year 2021 Chevrolet Trailblazers factory-equipped with optional 17-inch sport terrain tires.

The certification label does not provide the required tire size and cold tire pressure information for front and rear tires.

If drivers are uninformed and overinflate or underinflate their tires, this may increase the risk of a crash.

What to do

GM will notify owners, and will mail corrected labels for customers to apply free of charge.

The recall is expected to begin July 6, 2020.

Owners may call Chevrolet customer service at (800) 222-1020. GM's number for this recall is A202304070.