Business

Biden close to becoming president-elect


Editor’s Note: Morning Money is a free version of POLITICO Pro Financial Services’ morning newsletter, which is delivered to our subscribers each morning at 6 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day’s biggest stories. Act on the news with POLITICO Pro.

Biden on his way to becoming president-elect — Pennsylvania appeared close to pushing Vice President Joe Biden over 270 electoral votes early Friday morning. Barring the (very unlikely) success of various legal challenges, that would mean Biden would be sworn in on Wednesday, Jan. 20 as the 46th president of the United States.

President Donald Trump on Thursday night spun out all sorts of nonsensical claims about fraud. But senior Republicans began to distance themselves from the likely outgoing resident of the White House on Thursday night. Expect that to continue, especially if Biden’s Electoral College vote continues to rise.

It’s certainly possible that Trump that will continue to try and claim victory and incite his supporters to oppose the peaceful transition of power. But the result of this election is not likely to wind up being especially close, despite how long it’s taken to count all the ballots. And if he does lose, Trump will eventually leave office peacefully, if not quietly. And he will likely claim for the rest of his life that he never actually lost.

So what’s next? — Senate Majority Leader Mitch McConnell has talked about the possibility of a new stimulus deal during the lame duck session of Congress. That could happen but it seems a bit unlikely. It’s still possible Democrats could take the narrowest of margins in the Senate by winning two runoffs in Georgia. But it’s more likely Biden will have to cut deals with McConnell, something he’s done a few times before.

Via our Burgess Everett, Alex Thompson, and Marianne LeVine: “During Barack Obama’s presidency … Biden’s propensity for cutting deals with … McConnell became a running source of aggravation for liberals. Now it will be the key to getting anything done at all. …

“Surely Biden would have preferred a Senate led by Chuck Schumer that could swiftly confirm his nominees and help shepherd an ambitious legislative agenda along with Speaker Nancy Pelosi. …

“But … Biden and McConnell have a real relationship — forged over the years as Senate colleagues and combatants. McConnell was the only Senate Republican to attend the funeral for Biden’s son Beau in 2015, and he’s largely stayed away from GOP attacks on Biden’s other son, Hunter.”

Hey, it’s jobs day! — Easy to forget, given everything else going on, but the October jobs report comes out at 8:30 a.m. Expectations are for a drop to 600K from 661K as the Covid-19 recovery continues to slow. Unemployment is expected to dip to 7.6 percent from 7.9 percent. But the number could be even lower.

Moody’s Mark Zandi emails: “Employment is expected to have risen by 250,000 from September to October. Pre-pandemic, this would be a solid gain, but with the economy still down over 10 million from its pre-pandemic peak this is disconcerting. It is also a big comedown from the monthly job gains this summer and suggests the jobs recovery is weakening and threatens to stall out. With the pandemic intensifying and the failure of lawmakers to provide additional fiscal support to the economy, the recovery is at significant risk.”

GOOD FRIDAY MORNING — Evidently it’s Friday. If you say so, we’ll take it. What a week. What a year. Email me on [email protected] and follow me on Twitter @morningmoneyben. Email Aubree Eliza Weaver on [email protected] and follow her on Twitter @AubreeEWeaver.

October jobs report at 8:30 a.m. expected to show a gain of 600K with unemployment dipping to 7.6 percent from 7.9 percent and wages up 0.2 percent …

MORE JOBS DAY PREP — Pantheon’s Ian Shephardson: “We expect to see a 300K payroll print today, well below the 600K consensus forecast, but the headline number is contingent on the government component, which is a wild card, thanks largely to the winding down of the 2020 Census.

MORE BAD ECON NEWS — Via Morning Consult: “Pay and income losses accelerated over the course of October for Americans living in households with annual incomes over $100,000, reversing a trend over the past 23 weeks.

“Looking ahead, a persistently high share of employed workers said in October that they expect to suffer a loss of employment income sometime within this month. At the same time, 41% of laid-off or furloughed workers do not expect to be rehired by their prior employers, 7 percentage points higher than September.”

POWELL WARNS OF COVID THREAT TO ECONOMY — Our Victoria Guida: “Federal Reserve Chair Jerome Powell … voiced worry about the growing number of coronavirus cases and warned that the pandemic could lead to lasting damage to the economy.

“Powell called the rise in Covid-19 cases in the U.S. and other countries ‘particularly concerning’ … ‘A full economic recovery is unlikely until people are confident that it’s safe to reengage in a broad range of activities,’ he said in a press conference after the central bank’s policy meetings this week. … The job market, Powell said, is only ‘sort of halfway’ recovered, and both the Fed and Congress will likely need to do more to help avoid long-term consequences, like persistently lower levels of growth.”

POWELL ON CLIMATE CHANGE — Our Zachary Warmbrodt: “Powell … declared that the central bank has a responsibility to protect the financial system from climate change risk, his boldest signal yet that the Fed sees it as a long-term threat to the economy.

‘“The public will expect and has every right to expect that in our oversight of the financial system we will account for all material risks and try to protect the economy and the public from those risks,’ Powell said at a press conference after the Fed’s monetary policy meeting. ‘Climate change is one of those risks.’”

FED LENDING PROGRAM IN PERIL? — Also via Victoria: “The Fed … has doled out billions of dollars in emergency loans to keep the economy afloat during a crippling pandemic, garnering broad bipartisan praise. Now, the lawmaker who is likely to head the powerful Senate Banking Committee if Republicans keep control of the Senate is signaling that the Fed should stop.

“‘If someone wants to make the case that we need the government to give money to people or businesses because they’re struggling, by all means you can make that case,’ Sen. Pat Toomey told POLITICO. ‘But that’s not a Fed exercise.’ The Pennsylvania Republican believes that the central bank’s emergency programs … should wind down at the end of the year.”

WALL STREET RALLIES AGAIN AS ELECTION WEEK GAINS CONTINUEAP’s Stan Choe, Damian J. Troise and Alex Veiga: “Wall Street’s post-election wave swept stocks solidly higher again Thursday, pushing the S&P 500 toward its biggest weekly gain since April. Markets are banking on Tuesday’s election leading to split control of Congress, which could mean low tax rates, lighter regulation on businesses and other policies that investors like remain the status quo. …

“The S&P 500 rose 1.9 percent, its fourth straight gain of more than 1 percent, and is now up 7.4 percent for the week. That would be its best week since the market was exploding out of the crater created in February and March by panic about the coronavirus pandemic.”

HEALTH CARE STOCKS ON THE MEND WSJ’s Charley Grant: “At least one clear winner is emerging as election results trickle in: the health-care industry. The prospect of a Democratic sweep had worried Wall Street.

“A broad index of health stocks had returned about 6 percent in the six months through Tuesday—results that lagged behind the S&P 500 by about 12 percentage points. Now investors can breathe a sigh of relief, as an outright blue wave has failed to materialize. Health stocks rose 4 percent on Wednesday.”

STOCK-PICKING HEDGE FUNDS EXTEND PAYDAY IN TRADING — Reuters’ Svea Herbst-Bayliss and Maiya Keidan: “Some U.S. stock investors had feared election week turmoil, but voters’ decisions at the ballot box helped many stock picking hedge funds extend a year of gains and even set a daily record, according to managers and people familiar with their returns.

“Money managers were positioned relatively cautiously coming into the U.S. presidential election on Tuesday, unsure of the future for corporate taxes, stimulus spending and regulation, managers and investors in their funds said.”

FED DOESN’T HAVE TO JUST WAIT ON WASHINGTON — WSJ’s Justin Lahart: “Federal Reserve officials have been forthright about their belief that the U.S. needs more fiscal stimulus to combat the Covid-19 crisis. But like everybody else straining to figure out the economic consequences of the election, they don’t know when that stimulus might come, how big it might be or what form it would take. So just to be sure, they might draw yet more arrows from their quiver.

“The Fed’s policy-setting committee on Thursday left overnight rates on hold, in keeping with its commitment to keep them there until it sees evidence of a tight labor market and inflation has obviously cleared its 2 percent target rate. It also said it would continue to purchase Treasurys and mortgage-backed securities.”

The Fed is also looking to add new details to its quarterly economic forecasts — Reuters’ Jonnelle Marte and Ann Saphir: “The Federal Reserve will publish new color around policymaker outlooks for interest rates and the economy, and release some details earlier, changes that could give fresh insight into rate-setting decisions.

“Starting with the quarterly summary of economic projections released at the December meeting, the Fed will publish details about the distribution of forecasts among participants at the same time it releases its policy decision, Fed Chair Jerome Powell said Thursday. The materials were previously not released until three weeks later, along with the meeting minutes.”

VOTERS BACK AT LEAST $26.7B OF MUNICIPAL BORROWING PLANS — Bloomberg’s Nic Querolo: “Americans approved at least $26.7 billion in state and local borrowing measures, more than half of the proposed bond sales on ballots across the country, while another $15.7 billion are still pending final results.

“So far, only $2.7 billion of bond measures, or about 6 percent of those proposed, had been defeated as of Thursday, according to a preliminary tally based on data compiled by IHS Markit and Bloomberg.”

751K SEEK JOBLESS BENEFITS AS VIRUS HOBBLES ECONOMY — AP’s Paul Wiseman: “The number of Americans seeking unemployment benefits fell slightly last week to 751,000, a still-historically high level that shows that many employers keep cutting jobs in the face of the accelerating pandemic.

“A surge in viral cases and Congress’ failure so far to provide more aid for struggling individuals and businesses are threatening to deepen Americans’ economic pain. Eight months after the pandemic flattened the economy, weekly jobless claims still point to a stream of layoffs. Before the virus struck in March, the weekly figure had remained below 300,000 for more than five straight years.”

MORTGAGE RATES FALL TO RECORD LOW FOR 12TH TIME THIS YEAR — Bloomberg’s Christine Maurus: “Mortgage rates in the U.S. fell to another record low. The average for a 30-year, fixed loan dropped to 2.78 percent, the lowest in data going back to 1971, Freddie Mac said Thursday. It was the 12th record low this year. The previous one, 2.8 percent, held for two weeks.”

TRANSITIONS — The American Bankers Association has promoted Thomas Pinder to general counsel. He was previously the trade group’s deputy general counsel. He succeeds Dawn Causey, who’s retiring.





READ NEWS SOURCE

This website uses cookies. By continuing to use this site, you accept our use of cookies.