Bank Stocks Nearing a Crisis-Era Threshold Raises Warning Sign


Jessica Menton, Elena Popina and Bre Bradham
Sun, May 7, 2023

(Bloomberg) -- The selloff in US bank shares is threatening to push them below a technical threshold that could signal more pain ahead for the broader stock market.

With the collapse of First Republic Bank worsening fears about the solvency of regional lenders, investors have pummeled financial stocks, leaving the S&P 500 financials index on the verge of falling back below its 2007 peak. For perspective, after the 2008 credit crash it took over a decade for that gauge to recover the ground it lost.

The financials index has been above the 2007 high since January 2021. If were to fall through that barrier now, it would be an ominous signal for the broader stock market, said hedge-fund manager Jim Roppel, founder of Roppel Capital Management.

Why? Because it could put further pressure on banks to conserve capital and cut back on lending, adding a drag to an economy already at risk of a recession after the Federal Reserve’s steep interest-rate increases over the past 14 months.

“You can’t have a bull market if bank stocks are falling,” said Roppel, who’s a long-term bull but currently is mostly in cash with the rest in defensive plays like gold and gold miners. “It’s like if an Olympic athlete had cinder blocks around their legs.”

Wild Week

Concerns about the stability of the banking system contributed to a tempestuous week as investors aggressively bet against the stocks. While the share prices rebounded on Friday amid speculation the selling was overdone, many remained down steeply, with Western Alliance Bancorp sinking 27% last week and PacWest Bancorp plunging 43%.

Individual investors — who were some of the market’s most reliable dip buyers in 2020 and 2021 — scooped up some bank stocks amid the rout. In the week through Wednesday, they were net buyers in shares of Bank of America Corp., Truist Financial Corp. and SoFi Technologies Inc., data compiled by JPMorgan Chase & Co.’s Peng Cheng show.

But there’s continuing concern on Wall Street that the ongoing turmoil among regional banks could fuel a tightening in lending. In fact, traders are betting that the toll could be so great that they stepped up wagers that the Fed — which just signaled that Wednesday’s rate hike may be its last — will start easing monetary policy as soon as July to stimulate the economy.

Even so, Nancy Tengler, chief investment officer of Laffer Tengler Investments, said it’s too soon to wade back into shares of beaten up banks. Instead, she’s been focused on technology and consumer-related stocks that would benefit from a drop in interest rates, though her firm added shares PNC Financial Services Group Inc. after it delivered strong profit growth and growing deposits.

“It’s not smart to chase some of these other bank stocks,” Tengler said. “You have to let the falling knife fall.”

Friday’s stock-market rebound was fueled by the stronger-than-expected monthly jobs report for April, which tempered fears of a recession. Still, while the 1.9% rally in the S&P wiped out most of last week’s decline in the broad benchmark, the financial stocks in the index lost 2.7% over the five sessions.

Scott Colyer, chief executive at Advisors Asset Management, said the S&P 500 would have to slump to 3,600 or lower for him to become more optimistic about stocks, as valuations remain pricey. It closed at about 4,136 Friday.

“We have to see have financials leading the way for the stock market to be in a sustainable uptrend — but that’s not what’s happening,” Colyer cautioned. “Don’t pick up nickels and dimes in front of a steam roller.”

There's a record $5.3 trillion is cash on the sidelines as investors get more bearish on stocks. Here's why that could mean big gains ahead.


Matthew Fox
Sun, May 7, 2023 

A trader works at the New York Stock Exchange NYSE in New York, the United States, on March 9, 2022.Michael Nagle/Xinhua via Getty

Investors can't stop piling up cash, with assets in money market funds ballooning to a record $5.3 trillion.

The surge in cash comes amid a combo of high interest rates and depressed investor sentiment towards the stock market.

But that massive pile of cash could be the fuel needed to drive the next bull market rally.

Investors are hoarding cash at record levels and there's no sign of the trend reversing amid high interest rates and depressed investor sentiment towards the stock market.

Money market fund assets have ballooned to a record $5.3 trillion, with inflows surging by $588 billion over the past ten weeks, according to a recent note from Bank of America.

That surge in cash held by investors came amid a flight-to-safety sparked by the regional banking crisis, in which three banks with combined assets of nearly $550 billion collapsed over a two-month period.

The recent fund flow surge into money market funds eclipsed the $500 billion fund inflows seen after the Lehman Brothers collapse in 2008, and was about half that of the $1.2 trillion that flooded money market funds during the onset of the COVID-19 pandemic.

Part of the reason why investors are stocking up on cash is to take advantage of a high risk-free rate of return of just over 4%. Another reason is because investors are downright bearish on stocks.

In AAII's most recent investor sentiment survey, which asks investors where they think the stock market will be in six months, bearish responses surged to 45% over the past week, which is a historically high reading for the 30+ year-old survey. The historical average for bearish responses is 31%.

Meanwhile, only 24% of respondents were bullish on stocks, which suggests that most investors are struggling to find a good reason to invest their money into equities amid the heightened uncertainty tied to the ongoing banking crisis.

And Fundstrat'sTom Lee agrees. That is, if the banking crisis continues to spiral out of control. In a Friday note, Lee told investors that "this is a tough time to argue adding risk" given the recent collapse of First Republican Bank and the extreme volatility seen in PacWest Bancorp and Western Alliance Bancorp.

"This raises too many tail risk issues including credit tightening, commercial real estate and wide economic implications," Lee said. And yet, Lee still sees a balanced risk/reward setup for the stock market as the banking sector shows signs of stabilizing and earnings results hold up better-than-expected.

And if ongoing developments in the banking sector, economy, and stock market turn better-than-expected, then there's a massive $5.3 trillion pile of cash that could act as fuel to drive the next bull market in stocks. That's because, according to Lee, much of the cash that's been built up over the past couple of years was withdrawn from the stock market.

"Retail liquidations of S&P 500 and Nasdaq stocks exceeds [retail's] purchases since 2019," Lee told Insider on Friday, referencing data from Goldman Sachs.

"I think stocks are flat vs. [a] year ago and sentiment far worse and there is way more cash on [the] sidelines. So there is definitely [a] flows story that could unfold," Lee said. Lee set his 2023 year-end price target at 4,750, about 15% higher than current levels.

If that massive cash pile starts to unwind, investors have few options on where to put it, and the stock market is likely a top choice.

Bank of America

Mystery Chinese spacecraft returns to Earth after 276 days

Sun, May 7, 2023 

BEIJING (Reuters) - An experimental Chinese spacecraft returned to Earth on Monday after staying in orbit for 276 days, China's state media reported, completing a landmark mission to test the country's reusable space technologies.

The uncrewed spacecraft returned to the Jiuquan launch centre in northwest China on Monday as scheduled, according to state media.

No details were given on what the spacecraft was, what technologies were tested, how high it flew, and where its orbits had taken it since its launch in early August 2022. Images of the craft have also yet to be released to the public.

The test marks an "important" breakthrough in China's research into reusable spacecraft technology that will provide a more convenient and inexpensive way to mount future space missions, state media reported.

In 2021, what may have been a similar spacecraft flew to the edge of space and returned to Earth on the same day in a mission that was also kept largely under wraps. It landed on Earth "horizontally," according to China's main space contractor at the time.

Commentators on Chinese social media have speculated that Beijing has been developing a spacecraft like the U.S. Air Force's X-37B, an autonomous spaceplane that can remain in orbit for years.

The uncrewed and reusable X-37B returned to Earth in November last year in its sixth and latest mission, after more than 900 days in orbit.

(Reporting by Ryan Woo. Editing by Gerry Doyle)

Analysis-Battle for China's electric SUV market heats up at home and abroad

Sun, May 7, 2023 

SHANGHAI (Reuters) - China is ground zero for the price war in electric vehicles and the battleground is shifting to SUV-styled EVs, the largest segment of the market, dominated by Tesla Inc and BYD.

The market, crowded with more than 90 models, is about to get even tighter with at least 20 new models of both Chinese and foreign brands launched in April, squeezing pricing and margins at home and driving exports, analysts and executives said.

EV makers in China have followed Tesla's bold price cuts by lowering prices for their own electric SUVs, cannabalising sales of internal combustion engine (ICE) vehicles as the price gap between the technologies narrows, analysts said.

The trend will spread abroad with growing exports of China-made electric SUVs.

"We're going to see a lot of Chinese exports because of the ultra-competitive market in China. It's actually going to be a pressure release valve," said Tu Le, founder of Beijing-based advisory firm Sino Auto Insights.

The market for SUVs has boomed in China over the past decade and now represents almost 40% of all cars sold, with 400 SUV models of all fuel types.

Almost as many China-made SUVs were sold in 2022 as cars of any type in Europe last year, or more than 11 million.

The popularity of electric SUVs has exploded since Tesla delivered its domestically-produced Model Y two years ago in China, making it one of the fastest-growing segments in the world's largest auto market.

GRAPHIC: Chasing Tesla - https://www.reuters.com/graphics/CHINA-SUVS/PRICING/gdvzqjgenpw/chart.png

Both domestic and foreign brands were represented among the new models rolled out at the Shanghai Auto Show in April.

Legacy automakers Volkswagen, BMW and Toyota are counting on new electric SUVs to bolster China sales.

Made-in-China EV startups Xpeng and Nio have six SUV models and the EV-only brands launched by Chinese state-owned car companies, such as GAC's Aion are also pushing all-electric SUVs.

They will compete with 93 existing electric SUV models in a market that saw 1.5 million sales in 2022, with the top 10 brands making up 84%, a Reuters analysis of data from China Association of Automobile Manufacturers (CAAM) shows.

There were 76 electric SUVs in 2020 before Tesla started producing Model Ys in China, with average annual sales amounting to just 3,000 units.

GRAPHIC: China's Love for SUVs is Growing - https://www.reuters.com/graphics/CHINA-SUVS/PRICING/dwpkdleenvm/chart.png

Despite recent minor price hikes, Tesla's Model Y is still 20% cheaper in China than in early October, when the U.S. automaker grappled with rising inventory.

DISCOUNT WAR

Xpeng, Leapmotor and others have fired back with their own discounts, while BYD offered a discount of $1,000 on its market-leading Song Plus SUV, or about 4% off.

Those refusing to slash prices on existing models to protect brand value have instead chosen to offer lower-than-expected starting prices for new models, along with longer driving ranges and greater autonomous driving features.

For example, Geely's premium EV brand Zeekr priced its new compact crossover Zeekr X from $27,500, 28% cheaper than Model Y and almost the same price as Honda's CR-V, first-quarter sales of which slumped 56%.

Mitsubishi Motors also said last week it had suspended for three months production of its Outlander SUV in China.

The reality is "brutal" for legacy foreign brands targeting the mass market with small SUVs priced below $40,000, such as Ford, said Le of Sino Auto Insights.

Ford's chief executive, Jim Farley, acknowledged the intense market competition for two-row, SUV-styled EVs as a factor driving China's car export boom.

"That's why they're going big on Europe. Europe is a premium export market. They're all going there," Farley said in April after a trip to China.

Ford will also restructure its China operations to turn one of its joint ventures into an export hub for low-cost commercial electric and combustion vehicles, Farley said last week.

General Motors, which saw profit from China tumble by almost a fourth in the most recent quarter, needs new EVs to be a success in order to rebuild its market share in China, but the pressure is intense.

"China has 100 vehicle brands vying for sales and a 50% capacity utilization rate," Chief Executive Mary Barra said.

Tesla and Renault have already been exporting their China-made electric SUVs to Europe on a large scale. Tesla will begin shipping Model Y crossovers from its Shanghai plant to Canada, its first exports to North America, Reuters reported.

Chinese automakers have their own plans to grow electric SUV sales to Europe.

Zeekr said it would bring the Zeekr X to western Europe while exports of BYD's Atto 3 SUV more than doubled in the first quarter as it started taking orders there.

"The styling of it (Atto 3) is in keeping with the higher driving position, the good space," said Mark Blundell, BYD's head of marketing in Britain.

"We just feel it's a good start point for us in the UK."

($1=6.9000 Chinese yuan renminbi)

(Reporting by Zhang Yan and Brenda Goh in Shanghai; Additional reporting by Nick Carey in London; Editing by Ben Klayman and Clarence Fernandez)

Iran hangs 2 in rare blasphemy case as executions surge

JON GAMBRELL
Mon, May 8, 2023

DUBAI, United Arab Emirates (AP) — Iran hanged two men Monday convicted of blasphemy, authorities said, carrying out rare death sentences for the crime as executions surge across the Islamic Republic following months of unrest.

Iran remains one of the world's top executioners, having put to death at least 203 prisoners since the start of this year alone, according to the Oslo-based group Iran Human Rights. But carrying out executions for blasphemy remains rare, as previous cases saw the sentences reduced by authorities.

The two men executed, Yousef Mehrad and Sadrollah Fazeli Zare, died at Arak Prison in central Iran. They had been arrested in May 2020, accused of being involved in a channel on the Telegram message app called “Critique of Superstition and Religion,” according to the U.S. Commission on International Religious Freedom. Both men faced months of solitary confinement and could not contact their families, the commission said.

The Mizan news agency of Iran's judiciary confirmed the executions, describing the two men as having insulted Islam's Prophet Muhammad and promoted atheism. Mizan also accused them of burning a Quran, Islam's holy book, though it wasn't clear whether the men allegedly did that or such imagery was shared in the Telegram channel.

Mahmood Amiry-Moghaddam, who leads Iran Human Rights, decried the executions as exposing the “medieval nature” of Iran's theocracy.

“The international community must show with its reaction that executions for expressing an opinion is intolerable,” he said in a statement. “The refusal of the international community to react decisively is a green light for the Iranian government and all their like-minded people around the world.”

It wasn't immediately clear when Iran carried out its last execution for blasphemy. Other countries in the Middle East, like Saudi Arabia, also allow for death sentences to be imposed for blasphemy.

The streak of executions, including members of ethnic minority groups in Iran, comes as monthslong protests over the September death of 22-year-old Mahsa Amini after her arrest by the country's morality police have cooled. Already, at least four people charged over alleged crimes from the demonstrations have been put to death. The protests, which reportedly saw over 500 people killed and 19,000 others arrested, marked one of the biggest challenges to Iran’s theocracy since the 1979 Islamic Revolution.

In 2022, Iran executed at least 582 people, up from 333 people in 2021, according to Iran Human Rights. Amnesty International's most-recent report on executions put Iran as the world's second-largest executioner, behind only China, where thousands are believed to be put to death a year.

Mehdi Hasan Torches Republicans By Naming The Only Thing They Really Stand For

Another Day, Another Mass Shooting

Ed Mazza
Mon, May 8, 2023

MSNBC’s Mehdi Hasan said it’s time to call the Republican Party what it really is as lawmakers on the right reject any attempt at gun control amid a wave of mass shootings.

“In America in 2023 there have been more mass shootings than there have been days,” he said on his show on Sunday evening, citing statistics from the Gun Violence Archive. “This is how we live now.”

Hasan systemically dismantled the usual right-wing talking points after mass shootings, including the notion that nothing can be done.

“They’re lying to you,” he said. “This isn’t about mental health, which every other country has problems with. It isn’t drugs, which every other country struggles with. It isn’t computer games, which every other country has. It’s the guns. It’s obviously the guns.”

He said it’s high time to place the blame where it belongs: On Republicans.

“Let’s stop saying ‘Congress must act’ and start saying ‘the Republican Party must act’,” he said. “Let’s stop treating the GOP as the party of law and order and treat them, more accurately, as the party of gun violence, of school shootings, of mall massacres.”

He called for a ban an assault weapons:



Hasan also ripped into another common GOP talking point after each mass shooting: the notion that the answer is in “thoughts and prayers” or that God has to provide the solution:

Former Army officer and witness to Texas mall shooting who calls himself a 'gun lover' says mental health isn't the problem: 'We need more gun control'


Katie Balevic
Sun, May 7, 2023 

Emergency personnel work the scene of a shooting at Allen Premium Outlets on May 6, 2023 in Allen, Texas.

Stewart F. House/Getty Images

Former Army officer who rushed to scene of mass shooting in Allen, Texas says US needs gun control.

Steven Spainhouer said he's a "gun lover" but that "this is going to keep happening" without stricter laws.

He added that it was a gun, not mental health issues, that "killed these people."

A witness to the deadly mass shooting at a Texas mall on Saturday said he's a "gun lover." Then he called for more gun control.

Steven Spainhouer, who said he is both a former police officer and a former Army officer, rushed to the scene of the shooting on Saturday, arriving even before emergency responders.

"When you get hit with an automatic weapon fire at close range, there is no opportunity for survival," Spainhouer told MSNBC. "I don't know what the gunman's problem was, but it wasn't mental health that killed these people. It was an automatic rifle with bullets."

A gunman opened fire inside Allen Premium Outlets on Saturday, killing eight people and injuring seven others before a police officer who happened to be nearby shot and killed him. Police have not yet identified the gunman or his motivations.

In a statement calling for stricter gun regulations, President Joe Biden said the gunman used an "AR-15 style assault weapon."

The shooting in a town north of Dallas came about a week after five people were killed in a shooting in Cleveland, a Texas town north of Houston.

Politicians resistant to gun control have blamed the prevalence and severity of American mass shootings on mental health – despite reports that only a small portion of violence is tied to mental illnesses.

"I'm a gun lover. I have guns. I'm a former police officer. I'm a former Army officer. But these M-4s, AR-15s, they've got to get off the streets, or this is going to keep happening," Spainhouer said on Sunday. "We've got to stop that at some point."



"All the politicians are going to make statements. They're going to offer prayers and condolences," Spainhouer said. "Prayers and condolences won't bring these people back. We need some action in our legislatures at the federal and state level for better gun control. And I'm saying that as someone who loves guns."

Climate change is bad for everyone. But this is where it's expected to be worst in the US.



Dinah Voyles Pulver, USA TODAY
Sun, May 7, 2023

If you’re thinking about a long-term real estate investment or shopping for a place to settle down for 20 or 30 years, you might be wondering which cities or states could fare better than others in a changing climate.

“There are no winners in a world where climate change gets worse,” said Alex Kamins, director of regional economics at Moody's Analytics and author of a recent study on climate risks in the United States.

Climate change is ramping up the long-term risk almost everywhere, said Kamins and others. Temperatures are increasing. Oceans are warming, and rising. And scientists say the heat and higher sea levels help make some natural disasters more extreme.

The impacts vary widely over time and space, so it’s difficult to make a definitive ranking that says “buy here, not there,” but a growing body of evidence helps highlight some general trends.

USA TODAY looked at data from First Street and Moody’s Analytics – two organizations examining future climate risk – to see what areas of the country are most at risk from these climate impacts over the next 30 years.

Insurers and mortgage companies are asking the same kinds of questions, Kamins said. Banks are being asked to “stress test their portfolios in preparation for the impact of climate change.”

While locations with the greatest risks seem obvious – think Florida – others might surprise you.

Here's your guide to what, when and where you can expect climate change impacts to be the worst in the U.S.

NEWSLETTER Subscribe to the weekly Climate Point newsletter

READ MORE Latest climate change news from USA TODAY

Each region sees risks

Climate change will have uneven impacts on the U.S. in coming decades. Some areas may experience more heat, more flooding, more extreme storms, or more intense wildfires – or all of the above.

The U.S. won’t see any locations underwater or wiped off the map over the next 30 years, Kamins said, but access to fresh water and insurance premiums will become bigger challenges.

“Every year it becomes increasingly crystal clear, just the amount of risk that we face, whether it’s increasingly severe natural disasters or droughts and heat risk,” he said. “In some cases it’s creating renewed momentum or brand new momentum for governments and businesses that hadn’t been thinking seriously about the impact of climate change before.”

Everyone loses out if others are impacted, because we all rely on goods and services from other states and countries, said climate scientist Michael Mann, director of the Penn Center for Science, Sustainability and the Media at the University of Pennsylvania. “It’s a domino effect.”

East Coast: Wind, flooding and sea level rise stack the deck against many counties and states, especially Florida and the Carolinas, Kamins said. Bustling economies and distance to the beach still attract people in droves, but at some point the tide literally will turn against communities along beaches and coastal rivers.

Southwest: Heat and fire bring increasing risks, particularly in Arizona, he said, even without factoring in the perils of a dwindling water supply.

Interior: Intense heat may affect these states the most in runaway warming scenarios, Mann said. Sudden downpours with unprecedented rain also are occurring more often, even though these states aren’t in hurricane-prone coastal areas. One study he co-authored showed some of the greatest risk of heat stress could be in urban areas in the Pacific Northwest and Great Lakes.

Idaho to Minnesota: A swath of states across the northern U.S. look better than most, with less-pronounced risks, Kamins said. Recent statistics on an influx of newcomers to Idaho and its burgeoning tech hub in Boise show people may be figuring that out. He expects Montana may be the next frontier within 10-20 years.

What are the causes of climate change? How can it be stopped?

What are the effects of climate change? Disasters, weather and agriculture impacts.

States that may face more climate change risk sooner

Texas - Its sheer size and geography means Texas has a lot of risk. First Street's data shows some of its counties are at great risk of wildfire, some face higher potential losses from tropical cyclone winds and some have greater flood risks. The Lone Star State leads the nation in billion-dollar disasters, according to information from the National Oceanic and Atmospheric Administration. It averages 5.3 such events a year, double the number it experienced in the previous 20, even adjusted for inflation.

Florida – 8,346 miles of shoreline, surrounded on three sides by water. Need we say more? Rising sea levels and extreme rainfall fueled by warming oceans, with the potential for more intense hurricanes while more people crowd into densely populated areas, increase the risks. Florida has the most top spots on First Street's list of counties that could see the biggest increases in the number of days with the very warmest temperatures they experience today.

New Jersey - The Garden State has counties among the top of First Street’s lists for potential increases in average annual wind losses, extreme fire risk and properties at risk of flooding. New Jersey suffered three hurricanes or their remnants in 2021-22, including Hurricane Ida, Hurricane Henri and the final vestiges of Hurricane Ian. Forecasts for higher winds from more tropical cyclones and hurricanes aren’t good news.

California - Over the past three years, the state has seen its largest wildfire season in history, its worst drought in 1,200 years and a string of record-setting atmospheric rivers. Golden State residents need no reminder of the risks they face, but First Street’s data shows some California counties high on its lists for most extreme fire risk and some cities with the greatest percentage of residential properties at risk of flooding.
Which states did Moody's Analytics find face the greatest physical risks?

When it comes to weather-related events, hurricanes are literally the heavy hitters when accounting for acute physical risk. Climate change already is cranking up the rain in some tropical storms and hurricanes and could be slowing them down over land but that research is still underway, scientists say. Floods and wildfires also figured into Kamins’ assessment of physical risks. Here’s his list:

Florida


Louisiana


South Carolina


North Carolina


Delaware


Rhode Island


New Jersey


Virginia


Massachusetts


Connecticut

Other locations suffer from change happening over time rather than in single headline-grabbing events. Think the creep of rising sea levels or warmer nights and higher average temperatures.

San Francisco faces above average risk across these categories and more, and is the nation’s most exposed large city, Kamins said.

Brown pelicans fly in front of the San Francisco skyline on August 17, 2018 in San Francisco, California.

It's one of those urban areas where residents aren’t used to temperature extremes and many homes don't have air conditioning, he said. In a world where temperatures rise 5-10 degrees, unlike Floridians, San Francisco residents are ill-equipped for dealing with heat and it could be economically damaging.

Other cities with more gradually increasing risk on the Moody’s Analytics list are:

Cape Coral, FL


New York City


Long Island, NY


Oakland, CA


Phoenix, AZ


Tucson, AZ


Wilmington, DE


West Palm Beach, FL


North Port, FL

Southeastern metropolitan areas are particularly risky because they’re experiencing rising sea levels and higher temperatures, in addition to a parade of cyclones that could be growing more intense, according to Kamins’ study. The top 10:

Jacksonville, NC


New Bern, NC


Myrtle Beach, SC


Wilmington, NC


Greenville, NC


Charleston, SC


Punta Gorda, FL


Deltona, FL


San Juan, PR


Palm Bay, FL


Goldsboro, NC
Billion dollar disaster data helps point to states already paying the price as the climate changes.

If there’s any doubt about risks from future climate change, look no further than NOAA’s list of the weather and climate disasters that caused at least $1 billion in damages.

At least 37 states suffered twice the number of billion dollar disasters this century than during the previous 20-years.

Tornado activity appears to be expanding in the Mid-South, with more frequent outbreaks, and a USA TODAY investigation showed extreme rainfall events are occurring more often along the Mississippi River Valley. Scientists say both trends may be linked to the warming Gulf of Mexico.

USA TODAY Investigation How a summer of extreme weather reveals a stunning shift in the way rain falls in America.

But it’s not just weather events causing the disaster toll to rise, NOAA said. More extreme weather events take a greater toll when population and development increase in vulnerable areas.

“Where you live is important, but how you live is just as important,” said Stephen Strader, a meteorologist and associate professor at Villanova University. “There are things we can do to better prepare our current developments for climate change.”

Billion dollar disaster events per year since 2001 (More than 3):

Texas - 5.3


Illinois - 3.9


Georgia - 3.7


Oklahoma - 3.6


Missouri - 3.5


North Carolina - 3.4


Alabama - 3.3


Tennessee - 3.3


Virginia - 3.2


Kansas - 3.1


Mississippi - 3.1

More than 300% increase in billion dollar disaster events per year since 2000:

Arizona - 500%


Wyoming - 450%


Utah - 400%


New Mexico - 367%


Nevada - 335%


Nebraska - 320%


Colorado - 300%


Wisconsin - 300%

When considering future scenarios, it’s important to note much remains within the world’s control, Mann said.

With substantial action to hold warming below 3 degrees F, "we can limit the worsening of extreme weather events," although sea level increases would already be locked in, he said. A lack of action would mean “impacts in the interior of our continent could be every bit as bad.”

How taking action could help On Earth Day, scientists tell us what 2050 could be like. Their answers might surprise you.

This article originally appeared on USA TODAY: What are the worst cities and states for climate change effects?

Brutal Heat Continues to Grip Asia in Warning for the World

Jasmine Ng
Mon, May 8, 2023 


(Bloomberg) -- Asia remains in the grip of a blistering heat wave, chiming with predictions from climate scientists that 2023 could be the world’s hottest year.

In an ominous sign ahead of the northern hemisphere summer, an emerging El Nino weather pattern is pushing the mercury to unprecedented levels in southern parts of the continent.

Vietnam reported its highest ever temperature of 44.2C over the weekend, triggering power shortage warnings, while Laos also likely broke records. The Philippines cut classroom hours after the heat index reached the “danger” zone, reflecting the potentially deadly combination of heat and humidity.

The scorching temperatures follow a pattern of increasing extreme weather in recent years that’s sending the world into uncharted territory. The sweltering conditions are testing the ability of governments to protect public health and also to prevent major disruptions to agriculture and power generation in economies that are still recovering from the ravages of Covid-19.

El Nino — characterized by warmer ocean temperatures across the Pacific — has far-reaching impacts on weather patterns around the world. It could bring relief to drought-parched areas of Argentina and the southern US, while blanketing parts of Asia and Australia with hotter, drier conditions. Coffee, sugar, palm oil and cocoa crops would be especially vulnerable.

Temperatures in Thailand remained above 40C in many northern and central regions over much of last week, pushing power demand to a fresh peak. A group of businesses and banks have asked the government to prepare an action plan to deal with a potential drought that they say might last for three years.

Rainfall in Malaysia may be as much as 40% lower in some areas, which could put palm oil production at risk in one of the world’s biggest producers of the commodity. Authorities are closely monitoring the return of forest fires and air pollution. An El Nino in 2015 caused a particularly bad episode of haze that was one of the worst environmental disasters in Southeast Asia.

Elsewhere in Asia, scorching temperatures have also roasted parts of China, India and Bangladesh over the past few weeks. Yunnan province, a major aluminum hub in southwest China, suffered its worst drought in a decade last month. India is on alert for more heat waves following soaring temperatures in April that prompted school closures in some states and caused at least 11 people to die of heat stroke after attending an event.

--With assistance from Thomas Kutty Abraham, Nguyen Kieu Giang, Manolo Serapio Jr. and Anuradha Raghu.

Recalling the eruption of Mount Pelée — deadliest volcano in the 20th century


Randi Mann
Sun, May 7, 2023 

Thumbnail: "Evacuees on Rue du Pavé, Fort-de-France after 1902 eruption, photographed by William H. Rau." Courtesy of Wikipedia/William Herman Rau


This Day In Weather History is a daily podcast by Chris Mei from The Weather Network, featuring stories about people, communities and events and how weather impacted them.


On Wednesday, May 7, 1902, Mount Pelée, on the island of Martinique in the Lesser Antilles, started to erupt. Around 29,000 people died, making it the deadliest eruption of the 20th century and one of the most destructive in recorded history.

On April 23, Mount Pelée started eruptive activity. The volcano let out a series of large phreatic explosions that occurred before subsiding until early May.

Pelee 1902 1

1902 eruption. Photograph of Mount Pelee by Angelo Heilprin. Courtesy of Wikipedia

When Pelée started to start up again, the sky filled with dark clouds and lightning. The mountain emitted ash that blacked out the sun.

On May 5, a mudflow came down a side of the mountain and buried around 150 people. The mudflow also triggered three tsunamis that damaged coastal buildings.

Between May 6 and 7, the phreatic explosions turned magmatic.

On May 8, at about 8 a.m., the volcano exploded. Lava and turbulent gases flowed down the mountain at hurricane speeds. The volcanic material reached Saint-Pierre at 8:02 a.m. No one could escape. Most of the city's population died. Only two people in the actual city survived, and a few people from surrounding areas. All survivors experienced severe burns.

Pelee 1902 
Remains of Saint-Pierre. Courtesy of Wikipedia

After the explosion, rescuers headed to the island. On May 20, Mount Pelée exploded again, killing 2,000 of the rescuers and other people who were helping with the aftermath. On Aug. 30, another eruption generated a pyroclastic flow, which killed an additional 800 people.

Mount Pelée continued to erupt until October 1905

AMERIKA
Teacher appreciation? Try better pay, more governors say

Sun, May 7, 2023 



HARRISBURG, Pa. (AP) — As schools across the country struggle to find teachers to hire, more governors are pushing for pay increases, bonuses and other perks for the beleaguered profession — with some vowing to beat out other states competing for educators.

Already in 2023, governors in Georgia and Arkansas have pushed through teacher pay increases. Ahead of Monday’s start of national Teacher Appreciation Week, others — both Republican and Democratic — have proposed doing the same to attract and retain educators.

More than half of the states’ governors over the past year — 26 so far — have proposed boosting teacher compensation, according to groups that track it. The nonprofit Teacher Salary Project said it is the most it has seen in nearly two decades of tracking.

“Today we have governors left and right from every political party and then some who are addressing this issue because they have to,” said founder and CEO Ninivé Caligari. “We’ve never seen what we are seeing right now. Never.”

In Idaho, Gov. Brad Little is aiming to raise the state’s average starting salary into the nation’s top 10. In Delaware, Gov. John Carney said competition for teachers is more intense than ever and a pay increase is necessary to “win the competition with surrounding states.”

It’s not clear how far pay raises will go toward relieving the shortages, though, and some teachers say it is too little, too late to fix problems that are years in the making.

Blame for teacher shortages has fallen on underfunding after the Great Recession, tight labor markets, lackluster enrollments in colleges and programs that train teachers and teacher burnout inflamed by the travails of the COVID-19 pandemic.

There has been no mass exodus, but data from some states that track teacher turnover has shown rising numbers of teachers leaving the profession over the past couple years.

Shortages are most extreme in certain areas, including the poorest or most rural districts, researchers say. Districts also report particular difficulties in hiring for in-demand subjects like special education, math and science.

Meanwhile, teacher salaries have fallen further and further behind those of their college-educated peers in other fields, as teachers report growing workloads, shrinking autonomy and increasingly hostile school environments.

Magan Daniel, who at 33 just left her central Alabama school district, was not persuaded to stay by pay raises as Alabama’s governor vows to make teacher salaries the highest in the Southeast. It would take big increases to match neighboring Georgia, where the average teacher salary is $62,200, according to the National Education Association.

Fixing teachers’ deteriorating work culture and growing workloads would be a more powerful incentive than a pay raise, she said.

She recalled, for instance, her principal asking her to make copies and lesson plans last fall while she was on unpaid maternity leave. Difficulty getting substitutes puts pressure on teachers who need time off for emergencies, she said, and spending nights and weekends on paperwork siphoned the joy out of teaching.

“I would not go back just for a higher salary,” Daniel said.

In Oklahoma, Joshua Morgan, 46, left his rural district a year ago because after 18 years he was still earning under $47,000. Oklahoma’s governor is talking about awarding performance bonuses, but Morgan said he would only go back to teaching for substantially more money — like $65,000 a year.

The national average public school teacher salary in 2021-22 increased 2% from the previous year to $66,745, according to the NEA, the nation’s largest teachers union. Inflation peaked around 9% at the time.

For new recruits, the math of paying for a college education is grim: The national average beginning teacher salary was $42,845 in 2021-22, according to the NEA. Teachers do often qualify for public service loan forgiveness, which forgives their student debt after they’ve made 10 years of monthly payments.

Besides fewer teachers getting certified, the “teacher pay penalty” — the gap between teacher salaries and their college-educated peers in other professions — is growing.

It reached a record 23.5% in 2021, with teachers earning an average 76.5 cents for every dollar earned by other college-educated professionals, according to the Economic Policy Institute, a nonpartisan think tank.

It has been widening for decades, researchers say. For men, it is 35% and for women it is 17% — reflecting the gender pay gap seen across the U.S. economy.

For Rachaele Otto and other Louisiana teachers, the prospect of a $3,000 salary increase proposed by the governor might be appreciated. But at roughly $200 a month after taxes, it’s not enough to keep a teacher who feels burned out or demoralized, Otto said.

“I know there are teachers willing to take pay cuts to leave the profession,” said Otto, 38, a science teacher in a rural Louisiana district. “If you double the salary, maybe that would change their thinking.”

Sylvia Allegretto, a senior economist who studies teacher compensation for the Center for Economic and Policy Research, called salary promises by governors one-time “Band-Aids” that barely keep up with inflation.

“You’re kind of chipping away at the margins,” Allegretto said. “You’re not fixing the problem, generally.”

For governors, raising teacher pay may be good politics, but raising it across the board may have little long-term impact. Getting better data on where the shortages are and then targeting raises — or bigger raises — to those areas will help more, researchers say.

Research shows a pay raise will have at least some effect on retaining teachers, said Ed Fuller, a Penn State associate professor who studies teacher quality and turnover. What is difficult to research, Fuller said, is the effect a raise has on a college student’s decision to enter a teacher preparation program — and take on debt.

Some districts haven’t waited for governors and legislatures to act.

Kentucky’s biggest school district, Jefferson County in Louisville, gave a 4% raise last year and the board approved another raise of 5% to start this coming July. It also started giving an annual $8,000 stipend to teachers who work with higher-need students.

Superintendent Marty Pollio wants the district to be the highest paying in Kentucky, calling the teacher shortage “a real crisis and a growing crisis.”

In Pennsylvania, the William Penn School District is offering signing bonuses for long-term subs and holding its first-ever teachers job fair.

Superintendent Eric Becoats said a teacher told him they can move to neighboring districts and make $10,000 more — something the relatively small and poor district cannot compete with right now.

Some teachers also tell him they will retire or leave the profession if they can.

Morgan said a major change in salary is required to overcome a major change in how teachers now view a profession where they once expected to stay until they retired.

“That’s not how the world works anymore,” Morgan said. “I’m seeing more educators, especially the younger ones, coming in and saying, ‘I’m not willing to put up with this.’”

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Brooke Schultz, a corps member for the Associated Press/Report for America Statehouse News Initiative, contributed to this report. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues. Data reporter Sharon Lurye also contributed from New Orleans.

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Follow Marc Levy on Twitter: http://twitter.com/timelywriter

Marc Levy, The Associated Press

WHAT RECESSION

Consumers willing to spend at US restaurant chains despite menu price increases



Brooke DiPalma
·Reporter, Booking Producer
Sun, May 7, 2023

In the latest earnings results for fast-food and fast casual restaurants, consumers willing to spend despite higher menu prices, and lower employee turnover helped propel the top players to double-digit same-store growth.

"I think it's a pretty resilient consumer, where you're seeing the price increases being absorbed, and very, very little pushback on that," BTIG managing director Peter Saleh said.

This quarter, U.S. same-store sales got a boost across the board: McDonald's was up 12.6 % year-over-year, Chipotle, rose 10.9%, Wingstop was up 20.1%, YUM! Brands' Taco Bell was up 9%, Starbucks rose 12%, Shake Shack was up 10.3%, and even Subway saw a spike in sales growth as it gears up for a sale, rising 11.7% in North America.

This is welcome news for investors, after all brands across the board increased their menu prices. Chipotle was one the brands to raise them the most, Saleh said in his coverage, yet its same-store sales also saw a boost. CFO Jack Hartung said menu price increases compared to a year ago are in "about a 10% range."

All this seemingly contradicts previous fears that higher prices would deter consumers, Saleh said. "We're just not seeing that right now."

At mega fast food chains, consumers are looking for value, Morningstar Analyst Sean Dunlop said. "We saw some evidence of consumers managing checks, particularly on the lower-income end of the spectrum."

YUM! Brands CEO David Gibbs told Yahoo Finance that the company tends to "flourish" in tough financial times, especially its Taco Bell brand. "People care a little bit more about value than they have over the last few years maybe when they were a little more flush with money in their pocket," Gibbs said.

In a call with investors, Papa John's CEO Rob Lynch said value was driving its customers as well.

"We're definitely entering into a period, if we're not already all the way there...value is going to become more important than it has been over the last 3 years and so it's critical for us to have a compelling and successful value strategy."

Saleh said he wouldn't call it a "a value war environment," however. "We still have all these restaurants [that] are still dealing with commodity inflation to a certain degree."
Menu price increases to moderate this year

Taco Bell drive-thru open for business with lush green plants and clear sky in a residential neighborhood, Walnut Creek, California, March 27, 2023. 

(Photo by Smith Collection/Gado/Getty Images)

Because of pressures like food input costs, labor costs, and other inflationary pressures, price increases will still happen, but maybe not in as vast of a jump as we saw last year.

"I think it's unlikely we see operators take too many incremental price increases in 2023, particularly as food input costs have moderated," Morningstar's Dunlop said.

Starbucks CFO Rachel Ruggeri told Yahoo Finance said the company would expect changes in price to start to moderate in the back half of the year, "as we get to more historical levels of pricing, which we've shared is typically around 1% to 2%."

The message was similar from YUM! Brands' Gibbs. "I do not anticipate taking as much price in 2023 as we did in 2022," he told Yahoo Finance. That's due to lower key input costs for food and "even the labor market has gotten a lot better."

Chipotle, the chain that took one of the largest price increases, is waiting to see how the year rolls out.

Despite an unpredictable inflation landscape, Chipotle's Hartung said the company doesn't have plans to make any price increases.


Company leaders said the easing of a tight labor market has also helped boost their bottom lines. In a call with investors, Shake Shack CEO Randy Garutti said lower turnover and a lot more people applying for jobs at Shake Shack is driving sales.

"That's just a huge win in every way," he said. "Turnover is expensive. It is hard to train people and mostly because you're just not up to the reps. You're just not up to speed and throughput. That's where the most gains are going to come from."

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Brooke DiPalma is a reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.