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Welcome to the Biden presidency — For better or worse, the current Trump era is now finally over with his Senate acquittal over the weekend. This doesn’t mean Trump won’t be a force in the GOP for years or perhaps resurface in 2024.
We will come back soon to how corporate America and Wall Street have to deal with the GOP going forward following the acquittal vote that featured a record 7 opposition party votes in favor of conviction. But for now, the focus turns squarely to President Joe Biden and his monumental tasks on Covid-19 and the economy.
And he hits the road this week to sell the stimulus with a townhall in Wisconsin on Tuesday and another in Michigan on Thursday while visiting a Pfizer vaccine plant. And on Friday he’ll take part in a virtual G-7 session.
Biden has a couple of goals here including making sure the bulk of his American Rescue Plan, perhaps without the $15 minimum wage, gets through the reconciliation process as soon as possible. And he hopes to reassure major international allies that the “Tariff Man” days are over and the U.S. will once again be more a partner than a cantankerous rival. He can leave the rest of the insurrection inquiry — which still has open questions — to a 9/11 style commission.
The president has significant advantages in that his approval rating is remarkably high even for a honeymoon-era new president. Maybe not Obama-level high. But still strong. And most elements of the rescue package enjoy enormous public support.
Biden is not likely to get the bipartisan support he wants on stimulus but he’s on fairly comfortable political ground simply slamming through most of the Covid money. Still, the clock is now running and he’s got to get that done and push the country toward herd immunity by late spring/early summer or his approval rating will plunge remarkably quickly. That’s really all his early presidency, and perhaps his entire presidency, is about. Failure on the economy and Covid will make anything else he wants to do on the environment or social justice largely meaningless.
Also big this week: GameStop hearings — Senate is out this week. But House Financial Services finally gets around to examining the massive run-up in GameStop and other “meme stocks” with a hearing on Thursday at noon. The hearing will focus in part on Robinhood Markets and its trading halt with CEO Vlad Tenev. But it will also feature Citadel CEO Ken Griffin, Melvin Capital CEO Gabriel Plotkin and several others.
While there are plenty of good questions surrounding the rise of meme stocks and the role Robinhood played, the hearing is likely to be sound and fury signifying … well you know.
Compass Point’s Isaac Boltansky: “Given the complexity of the underlying issues, coupled with the mythical quest for the perfect sound bite, our sense is that the GameStop/Robinhood hearing will be little more than political theater that fails to alter the policy conversation.
“[Payment for Order Flow] is ripe for attack given the potential for misaligned interests and its admittedly nefarious name, but PFOF proponents argue that the practice has increased market liquidity and lowered consumer costs.”
GOOD TUESDAY MORNING — Welcome back! Hope everyone had a relatively restful weekend once the impeachment process ended. Email me on [email protected] and follow me on Twitter @morningmoneyben. Email Aubree Eliza Weaver on [email protected] and follow her on Twitter @AubreeEWeaver.
KUDLOW BACK ON THE AIR! — Via FOX: “FOX Business Network will debut Kudlow, a new weekday business program hosted by FOX News Media contributor and former National Economic Council Director Larry Kudlow on Tuesday, February 16th.
“Airing weekdays live at 4 PM/ET, with an encore presentation at 7 PM/ET, the program will feature closing market analysis as well as interviews …The premiere will feature an exclusive interview with former Treasury Secretary Steven Mnuchin”
DEESE IN THE SPOTLIGHT — Our Megan Cassella, Tyler Pager, and Marianne LeVine: “The success of … Biden’s presidency will be defined by his ability to end the Covid-19 pandemic and rescue the American economy. And that’s thrust the man at the center of the initial response — Brian Deese — into the spotlight, drawing plaudits from allies but making him a target for critics who question whether he’s up for the task.
“The 42-year-old head of the National Economic Council, Deese has emerged as a major player in the early days of the administration, holding the ear of the president as he shuttles between the White House and Congress. … Few doubt Deese’s intelligence, and his close relationship with Biden is a potent source of his authority on both ends of Pennsylvania Avenue.
“But while supporters have praised his efforts to win support for a $1.9 trillion relief package, Deese also has drawn criticism from Democrats and Republicans alike, some of whom have bristled at how much power he’s been given and how he’s wielding it.”
TUBMAN AND THE $20 — Ellen Feingold, curator of the National Numismatic Collection at the National Museum of American History, Smithsonian Institution in POLITICO: “It’s not hard to understand why some Americans might see the redesign as a radical break from tradition. For the past century, U.S. banknotes have featured a static set of Founding Fathers and presidents, government buildings and national memorials …
“But this is a misperception. In the 1800s, currency redesigns were not at all uncommon. In fact, banknotes changed regularly, and featured a vibrant range of people, scenes and symbols. The United States did not have standardized designs depicting only a handful of political figures until the 1920s.”
DEBT RELIEF DEBATE — Via our Bjarke Smith-Meyer: “EU finance ministers are willing to give African countries more debt relief to help combat the coronavirus and will discuss the topic when they convene for this month’s Ecofin Council today.
STOCK FUTURES EDGE HIGHER — WSJ’s Anna Hirtenstein: “U.S. stock futures edged higher Monday, following the major indexes’ climb to close at record highs last week. Futures tied to the S&P 500 rose 0.5 percent, signaling an extension of last week’s muted gains that sent the broad-market index to an all-time high Friday. Contracts linked to the Dow Jones Industrial Average advanced 0.6 percent. Markets in the U.S. are closed Monday for Presidents Day holiday.”
BITCOIN’S EPIC RUN WINNING MORE ATTENTION ON WALL STREET — Bloomberg’s Lynn Thomasson and Joanna Ossinger: “Signs of a widening embrace across the financial services industry sent Bitcoin to new heights, with the cryptocurrency closing in on $50,000 for the first time before falling back.
“A week after Tesla announced its $1.5 billion investment in Bitcoin, the digital asset continues to make inroads into traditional finance, including news that an investment unit of Morgan Stanley is considering whether to bet on Bitcoin. Canada also approved the first North American Bitcoin exchange-traded fund.”
BORROWING BINGE REACHES RISKIEST COMPANIES — WSJ’s Sam Goldfarb and Matt Wirz: “Investors’ near-insatiable demand for even the riskiest corporate debt is fueling a Wall Street lending boom, offering lifelines for struggling companies even as the coronavirus pandemic still drags on the economy.
“Companies such as hospital operator Community Health Systems Inc. and newspaper publisher Gannett Co. Inc. have issued a record $139 billion of bonds and loans with below investment-grade ratings from the start of the year through Feb. 10, according to LCD, a unit of S&P Global Market Intelligence. More than $13 billion of that debt had ratings triple-C or lower — the riskiest tier save for outright default — about twice the previous record pace.”
BIDEN TO SPEAK AT VIRTUAL MEETING OF WORLD’S MAJOR ECONOMIES — AP’s Alexandra Jaffe: “President Joe Biden will speak at a virtual meeting of the world’s major economies on Friday to discuss the coronavirus pandemic and global vaccination distribution, according to the White House.
“Biden is expected to speak about the need for a global response to the pandemic and to recommit the U.S. to multilateral engagement, a stark contrast from President Donald Trump, who developed an isolationist foreign policy that saw the U.S. withdraw from major global agreements and alliances. Since entering office, Biden has reversed many of Trump’s isolationist moves, including by rejoining the World Health Organization.”
INCOMING WTO CHIEF WARNS ‘VACCINE NATIONALISM’ COULD SLOW PANDEMIC RECOVERY — Reuters’ Andrea Shalal: “The World Trade Organization’s incoming chief on Monday warned against ‘vaccine nationalism’ that would slow progress in ending the Covid-19 pandemic and could erode economic growth for all countries — rich and poor.
“Ngozi Okonjo-Iweala told Reuters her top priority was to ensure the WTO does more to address the pandemic, saying members should accelerate efforts to lift export restrictions slowing trade in needed medicines and supplies.”
BIDEN AND THE FED LEAVE 1970S INFLATION FEARS BEHIND — NYT’s Jim Tankersley and Jeanna Smialek: “Presidents who find themselves digging out of recessions have long heeded the warnings of inflation-obsessed economists, who fear that acting aggressively to stimulate a struggling economy will bring a return of the monstrous price increases that plagued the nation in the 1970s.
“Now, as President Biden presses ahead with plans for a $1.9 trillion stimulus package, he and his top economic advisers are brushing those warnings aside, as is the Federal Reserve under Chair Jerome H. Powell.”
BIDEN FACES QUESTIONS ABOUT COMMITMENT TO MINIMUM WAGE HIKE — AP’s Will Weissert and Alexandra Jaffe: “The coronavirus has renewed focus on challenges facing hourly employees who have continued working in grocery stores, gas stations and other in-person locations even as much of the workforce has shifted to virtual environments.
“Biden has responded by including a provision in the massive pandemic relief bill that would more than double the minimum wage from the current $7.25 to $15 per hour. But the effort is facing an unexpected roadblock: Biden himself. The president has seemingly undermined the push to raise the minimum wage by acknowledging its dim prospects in Congress, where it faces political opposition and procedural hurdles.”
JPMORGAN: MARKETS MOST COMPLACENT THEY’VE BEEN IN TWO DECADES — Bloomberg’s Cecile Gutscher: “Global investors are the least fearful they’ve been in two decades, and perhaps the most greedy. A JPMorgan Chase & Co. gauge of cross-asset complacency based on valuations, positioning and price momentum is nearing the highest level since the time the dot-com bubble burst and some companies found out burning cash faster than they made it wasn’t quite effective as a long-term survival strategy.”