Macro
TheHouseandSenatepassedashort-termCRtoavoidagovernmentshutdown.
ThenewdeadlinesforbillstofundthegovernmentareMarch8andMarch22.
Halftheappropriationsbillsareduebyeachdate.WearehopefulthatCongress
willpassappropriationsforthefullfiscalyear.
Long-timeRepublicanSenateleaderMitchMcConnellannouncedthathewill
stepdownfromhispositionattheendoftheyear,thoughhewillstayinthe
Senateuntilhecompleteshistermin2027.Nextweek,welookforwardto
SuperTuesdayonMarch5andtoPresidentBiden’sStateOftheUnionaddress
onThursday,March7.
Ontheglobalfront,UkrainestillawaitsU.S.assistance.TheU.S.willairdrop
humanitarianreliefintoGazawhiletalksonaceasefirecontinue.TheNational
People’sCongressinChinaissettobeginitsannualmeeting.
Additional U.S. Policy Research Highlights from our Team this Past Week
Energy:JamesLucierhostedacallThursdaytodiscussthemanymovingpieces
regardingthefutureofelectric vehicles(EVs),includingelections,litigation,
regulatorychanges,andthepossiblerepealoftaxbenefits(requestreplay).
TheEPAwillreportedlydropexistingnaturalgas-firedpowerplantsfromits
long-anticipatedpower plant rule.Thismarksasubstantialweakeningofthe
rule.Thenewsbegantobreakatthisweek’swinterpolicyconferenceofthe
NationalAssociationofRegulatedUtilityCommissioners.Stateregulatorsatthe
conferenceexpressedconcernthatretiringbaseloadpowerplantstooquickly
wouldresultinblackouts.
TheDepartmentofEnergymisseditsMarch1deadlineforprovidingupdatesto
theGREETmodelthatwillclarifywhetherconventionalethanolcanqualifyas
March 2, 2024
Rich Linville
richard.linville@capalphadc.com
913-677-6302
Courtney Oldham
courtney.oldham@capalphadc.com
202-548-0102
Mike Giordano
michael.giordano@capalphadc.com
201-721-8604
Paul Murray
paul.murray@capalphadc.com
201-914-6031
U.S. POLICY
Weekend Roundup from
Washington + Monday Call
Capital Alpha Partners, LLC / 600 Pennsylvania Ave. SE / Suite 220 / Washington, DC 20003 1 of 4
theGREETmodelthatwillclarifywhetherconventionalethanolcanqualifyas
feedstockforSustainable Aviation Fuel (SAF).DOEreportedlyneedsafewmoreweekstofinishthework.
Financials:TheSEC’sannouncementthatit’sfinallygoingtovoteon–andpresumablyapprove–a
climate-risk disclosure rulebringsusclosertoalikelylawsuit.IanKatzpredictstherulewillpleaseneitherthe
publiclytradedcompaniesaffectednorthosewhohavebeenpushingfortougherclimate-relatedregulations.
Katzexpectsatleastonemajorlawsuitfromindustrywithinweeks(Katz,Feb.29).
Whileit’saclosecall,KatzbelievesthattheCapital One-Discover dealwilleventuallybeOK’d,butnotbefore
theNovemberelections.Evenifitweren’tanelectionyear,itwouldprobablytakeatleast12monthsfor
regulatorstodecide.Katzthinksthecompaniesprobablytookthisintoaccount–theapprovalprocesswould
verylikelybeeasierunderaRepublicanadministration(Katz,Feb.26).
OnFriday,KatzhostedMilanDalalofgovernmentrelationsfirmTigerHillPartnerstodiscussprospectsfor
approvaloftheCOF-DFS deal,regulators’viewsofotherpotential mergers,andpendingfinancialrules
(requestreplay).
TheCFPBhasdesignatedWorldAcceptanceCorp.,basedinGreenville,SC,assubjecttoexamination,saying
thereisreasonablecausetodeterminethattheinstallmentlender’s“conductposesriskstoconsumers.”Katz
seesitasanexampleofCFPBDirectorRohitChoprapushingaheadwithanaggressivesupervisionstance
despitethelegaluncertaintyhangingoverthebureau(Katz,Feb.26).
Health: TheWhiteHouse’sexecutiveorder(EO)toprotect“personal”datawasexpected(Smith,Jan.30)as
partofacoordinatedlegislativeandadministrativeefforttopreventChinesestateactorsfromusing
U.S.health dataformilitarypurposes.RobSmiththinkstheEOlikelyincreasestheoddsthatCongresspasses
someversionofBIOSECUREthistermandthattheupcomingFY25NDAAbillisthemostlikelylegislative
vehicle,particularlygiventhe2024NDAAactivityregarding Chinese biotechs(Smith,Feb.29).
AnAlabamaSupremeCourtrulingthatfrozenembryosarechildrenhaspromptedDemstosaytherulingis
theresultofDobbs,whileGOPlawmakersandcandidatesscrambledtosaytheystronglysupportIVF.The
legalconditionsleadingtothedecisionarecomplex,alsoinvolvingchangestoAlabamalaw,whichlikely
meansthatthisissuewillneedtoberesolvedbytheALlegislatureratherthantheU.S.SupremeCourt
(Monk, Feb.26).
Defense: Therisk remains for U.S. defensethatcontinuingresolutions(CRs)extendpastApril30,nothingis
donetodefusetheprovisionsoftheFiscalResponsibilityActof2023,anditssequesterprovisionsare
implementedafterApril30.ThepremiseisthatCongressneedsmoretimetohammeroutdifferencesover
appropriations,butthat’sacanard,perByronCallan–there’sbeenmorethanenoughtimetoreachan
agreement(Callan,Feb.28).
CallanhostedaconferencecallonThursdaytodiscusstheAirForce’sCollaborative Combat Aircraft (CCA)
programandotheraviationprogramswithBillSweetmanofValkyrieStrategicSolutions(requestreplay).
European defense stocksareagainoutperformingglobalpeersin2024.Anopenquestionishowmuch
higherregionalspendingcouldrise.Wedon’tknowyetiftherateofspendingincreaseswillmoderatein
Capital Alpha Partners, LLC / 600 Pennsylvania Ave. SE / Suite 220 / Washington, DC 20003 2 of 4
higherregionalspendingcouldrise.Wedon’tknowyetiftherateofspendingincreaseswillmoderatein
2025-2030orifEuropeanbudgetsareinasupercycle.Callsformorecontractorconsolidationmaybe
misguided(Callan,Feb.25).
Callanfurtherdiscusseshisassessmentsofmajorcatalysts,defenseissues,anddataintheMarchversionof
hisDefense Scorecard.MainissuesandeventsthismonthwillbetheFY24DODbudget;theFY25DODbudget
requestandplan;investormeetingsforGEAerospace,DRS,andHII;anArmyconference/tradeshowatthe
endofthemonth;andapossiblesecuritysupplemental(Callan, Mar.1).
Alsoofnotethisweek:apossible BA-SPR deal;BWX Technologies’ investor day(Callan,Mar.1;Feb.28).
TMT: SurveyresultsontheAffordable Connectivity Program(ACP)releasedThursdaybytheFCCtrackwith
congressionalcriticismthatmoneyhasbeengoingtohouseholdswhowerealreadypayingtheirISPbills.
RobertKaminskistilldoesnotexpectACPfundingtobereplenishedwhenitexhaustsinMay.
KaminskiexpectslitigationfromtheFCC's new ordermandatingthecollectionandpublicdisclosureofdata
fromtelevisionbroadcastersontheiremployees'gender,race,andethnicity.Theproblemislessaboutthe
collectionthanaboutthegovernmentmandatingpublicdisclosure,whichislikelyaconstitutionalproblem
(Kaminski, Feb.26).
Newinthe FTC's antitrust case against FacebooktounwindInstagramandWhatsAppisacourtfilingdetailing
aprocessforsummaryjudgmentthatisexpectedtoconcludeinthefallorbeforetheendoftheyear.Ifit
survivessummaryjudgment,Kaminskiexpectsatrialin2025.Thiscaseislikelyaloserforthegovernment
(Kaminski, Feb.26).
InaDCspeechonMonday,CommerceSecretaryRaimondodiscussedCHIPS Act funding priorities,stating
thatthegovernment'sgoalisnottofundasmanycompaniesaspossible,butrathertomake"targeted
investments"intheleadingedge.Shealsosaidthattheywillbeprioritizingprojectsthatwillbeoperational
by2030(Kaminski, Feb.26).
IhopethatyoucanjoinusonMonday,March4at10:00AMET/3:00PMGMTforourweeklyMorning Thoughts
from Washingtoncall(registrationlink),duringwhichwe'llbediscussing:
Biden’sStateoftheUnion;MitchMcConnellbowsout;Allaboardtheminibus!;
TheFY25DoDbudgetandplan;
Bankjitters;creditcardlatefees.
Pleaseletmeknowifyouhaveanyquestionsorwouldlikeafollow-upfromourteam.Enjoyyourweekend!
Best,
Rich
Capital Alpha Partners, LLC / 600 Pennsylvania Ave. SE / Suite 220 / Washington, DC 20003 3 of 4
ANALYSTCERTIFICATION
Thefollowinganalystsherebycertify(1)thattheirviewsaboutanyandallofthesubjectcompaniesand
securitiesdiscussedinthisreportareaccuratelyexpressedand(2)thatnopartoftheircompensationwas,is,
orwillbedirectlyorindirectlyrelatedtotheviewsexpressedinthisreport:RichLinville,CourtneyOldham,
MikeGiordano,PaulMurray.
IMPORTANTDISCLOSURES
Thispublicationisforprivatecirculationanddistributioninitsentirety;itisprovidedtoyouforinformation
purposesonly.Thisisnotanoffertobuyorsellorthesolicitationofanoffertobuyorsellany
security/instrumentortoparticipateinanyparticulartradingstrategy.CapitalAlphaPartners,LLC(“Capital
Alpha”)makeseveryefforttousereliable,comprehensiveinformation,butwedonotrepresentorwarrant
thatitisaccurateorcomplete.TheviewsinthispublicationarethoseofCapitalAlphaandaresubjectto
changewithoutnotice.CapitalAlphahasnoobligationtoupdateitsopinionsortheinformationinthis
publication.CapitalAlphamayprovideitsservicestopublicandprivatecompaniesthatarereferencedin,or
thathaveafinancialinterestinthesubjectmatterof,CapitalAlpha’sresearch.NeitherCapitalAlphanorany
ofitsofficers,directors,partners,employees,oraffiliatesacceptsanyliabilitywhatsoeverforanydirector
consequentiallossarisingfromanyuseofthispublicationoritscontents.Analystsmayownsecuritiesofthe
issuersdiscussedherein.
©CopyrightCapitalAlphaPartners,LLC(2024).Allrightsreserved.Nopartofthispublicationmaybe
reproduced,sold,orredistributedwithoutthepriorwrittenpermissionofCapitalAlphaPartners,LLC.
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