| | | | | | | | | | | Axios Markets | | By Emily Peck and Matt Phillips · Jul 05, 2022 | | 🌅 Good morning and welcome back! Emily here: Matt's on vacation for the week, so Kate Marino and I are holding down the fort — and combing through all the great ideas you emailed. Keep 'em coming! Today's newsletter, edited by Kate, is 1,054 words, 4 minutes. | | | | | | 1 big thing: Economists rush to understand the post-Roe world |  | | | Illustration: Shoshana Gordon/Axios | | | | Economists are racing to study the impact of the Supreme Court's decision overturning the right to abortion. They're examining the fallout on women's lives across a range of factors from health to finances, Emily writes. Why it matters: There's a raft of research on the impact of the 1973 Roe v. Wade decision, but the work didn't get seriously underway until the late 1980s. Now, because of advances in technology and research methods — and because the profession has evolved to study "women's issues" — researchers will move more quickly. - Their studies can help policymakers and health care providers adjust to the post-Roe landscape.
Zoom out: About half the states in the country are expected to ban or heavily restrict abortion; the rest won't. That's precisely the kind of natural experiment economists like — where the cause is clear and they can examine the effect. - This kind of real-world-based methodology emerged after Roe, as the profession as a whole moved away from theoretical research. (Perhaps most famously Nobel-prize winner David Card and Alan Krueger looked at what happened after one state raised the wage floor and its neighbor did not.)
- This "credibility revolution" fueled the rise of abortion study, said Caitlin Knowles Myers, an economist at Middlebury College known for her work on abortion.
What they're saying: "What we're looking at is a natural experiment of a magnitude we haven't seen since the Roe era," said Myers. - She's been deluged with requests from social scientists looking for help accessing data. "My email is absolutely flooded," she said.
- "Everyone under the rainbow is going to be publishing on this," said Kathryn Anne Edwards, an economist at the RAND Corporation.
What's next: Researchers are now crafting studies and gathering data to understand: What happens to abortion rates? Are women still able to access care? How far will they travel to get it? Will there be more second-trimester abortions because it takes longer to find a provider? - Some of this work was already underway after Texas passed its restrictive SB 8 law. And even before, over the years, as states enacted laws that targeted the regulation of abortion providers, which made it harder to access care.
- Researchers will also study the health fallout for women, watching maternal mortality and pregnancy-related disability.
Economists will, of course, also look at economics. Some household financial impacts will happen quickly. - For example, pregnancy can force women out of work, and have an immediate effect on families.
- Other economic outcomes on labor force participation, earnings and career advancements will take longer to unspool, said David Slusky, an economics professor at the University of Kansas. Slusky studied the effects of COVID clinic shutdowns on women and is now using the same methodology to look at Dobbs.
The bottom line: In its majority opinion, he said, the Supreme Court said it was hard to assess the effect of abortion on the lives of women. - "That's not true. Economists have done it," Slusky said. And they'll do it again.
|     | | | | | | 2. Catch up quick | | 💶 Euro slides to 20-year low against the dollar. (CNBC) ✈️ Air travel hits pandemic record despite airline chaos. (Axios) 📈 Swiss inflation hits near 30-year high. (Bloomberg) | | | | | | | | 3. Measuring distress |  Bonds have sold off a ton this year — just look at Apple. It's one of the most creditworthy U.S. companies — sitting on loads of cash — and you can pick up its bonds in the secondary market for a mere 70 cents on the dollar, down from around 100 last fall. Seems worrisome! - Well, the New York Fed has constructed a new index to evaluate just how distressed — and potentially dysfunctional — the corporate bond market is. The good news: It's actually not that bad right now, Axios' Kate Marino writes.
Why it matters: Economic growth is slowing, and the risk of recession is top of mind. What happens in the bond market can provide early signals of broader economic and market woes. The big picture: The index shows that while corporate distress has zoomed up since the beginning of the year, it's actually still below the median historical level. - If anything, this shows just how historically loose the conditions of 2021 were. Capital was cheap and abundant, and defaults were minimal — thanks to unprecedented monetary stimulus.
- Now, we're heading back to "normal."
How it works: The NY Fed researchers created a single index that combines factors in the secondary market — like how easy or hard it is to make a trade, and whether prices are rising or falling — and the primary market, meaning how many bonds companies are issuing and how much they cost. - The index value is between 0 and 1; a lower value means the market is functioning better.
State of play: Since the start of the year, corporate bond issuance has fallen, and so have bond prices in secondary trading (meaning yields are up), as we've reported. - This is in part because the Federal Open Market Committee is raising rates, in a battle against inflation — and in part because the war in Ukraine is amping up risk across all financial markets.
- So, when you look at the move in those Apple bonds based on their yield, it may make more sense: they're yielding around 4% now, compared to 2.7% when Apple issued them last August, pricing data from Bondticker shows.
The bottom line: The FOMC is in the midst of one of the fastest monetary tightening phases in its history — so things could still get messier. Pay attention to this index for signs that the market is struggling to cope. | | | | | | | | A message from Axios | | Engage employees with transparent and inspiring comms | | |  | | | | Companies around the world lost $7.8 trillion in productivity in 2021 because of an unengaged or actively disengaged workforce. It's time for a smarter strategy. Leaders at Edelman and Briq offer best practices to advance your leadership communications strategy. Go deeper | | | | | | 4. Gas price respite |  Data: FactSet; Chart: Axios Visuals Wholesale gasoline futures are falling — which could spell (a little) relief at the pump for Americans, Kate writes. The big picture: Movement in retail gas prices tends to follow that of the unfinished wholesale gas, known as "Reformulated Blendstock for Oxygenate Blending," or RBOB. - RBOB has fallen about 15% since its high on June 9, to $3.69.
- Gas at the pump has pulled back, too — but only by about 3% on average as of last week, according to the Energy Information Administration.
What to watch: Given the recent leg down in RBOB, "I would look for gasoline prices to drop about 30 cents per gallon in the weeks ahead," Neil Dutta, head of economics at Renaissance Macro, wrote in a research note on Friday. | | | | | | | | A message from Axios | | Engage employees with transparent and inspiring comms | | | | | | | | Companies around the world lost $7.8 trillion in productivity in 2021 because of an unengaged or actively disengaged workforce. It's time for a smarter strategy. Leaders at Edelman and Briq offer best practices to advance your leadership communications strategy. Go deeper | | |  | It's called Smart Brevity®. Over 300 orgs use it — in a tool called Axios HQ — to drive productivity with clearer workplace communications. | | | | | | Axios thanks our partners for supporting our newsletters. If you're interested in advertising, learn more here.
Sponsorship has no influence on editorial content. Axios, 3100 Clarendon Blvd, Arlington VA 22201 | | | You received this email because you signed up for newsletters from Axios.
Change your preferences or unsubscribe here. | | | Was this email forwarded to you?
Sign up now to get Axios in your inbox. | | | | Follow Axios on social media:    | | | | | |
No comments:
Post a Comment