News: Finally, it's the final week — Left targets potential Biden WH picks

Monday, October 26, 2020

Finally, it's the final week — Left targets potential Biden WH picks — Wall Street wants its workers back

Oct 26, 2020

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Quick Fix

Finally, it's the final week — Hard to believe but there are now just 8 days until voting ends in the 2020 election on Nov. 3. We say "ends" given that the 60 million or so votes already cast make the term "Election Day" an anachronism. We've been living Election Day for months now.

President Donald Trump clearly trails Democratic nominee Joe Biden in national surveys by an average 8 points. And Biden tops 50 percent in many polls, a key indicator of his strength. At this point in 2016, Hillary Clinton led Trump by around 3 points and was below 50 percent. And Biden is now slightly ahead in Florida and North Carolina and tied in Georgia suggesting at least the possibility of an Electoral College blowout. We are NOT predicting that. But the numbers are leaning that way.

The White House is also making a somewhat odd closing argument that it has given up on controlling Covid-19 despite spiking infections including in the administration itself. (More below.)

Moving on to the Biden White House — It's still too early for this kind of thing but it's happening everywhere as corporate America prepares to battle progressives for influence in a potential Biden White House.

Thorn Run Partners' Jason Rosenstock in a note going out this a.m.: "[A] clear narrative has emerged about how progressives are keeping close tabs on potential nominees in order to root out the possibility of any whiff of impropriety (however they define it). In fact, the Revolving Door Project apparently has a web page all ready to go, even if it is currently blank.

"Of course, for the liberal left, the easiest way for a potential administration official to have tainted him or herself is to have worked for a 'corporate interest' (however defined) or even worse having lobbied for corporations."

Top targets at the moment for the left include Lael Brainard for Treasury Secretary and Jeff Zients for anything. But the left will rise up in righteous anger if Biden even floats an actual Wall Street person for a top White House job.

What if everyone is wrong about the election? — Cap Alpha's Ian Katz: "Though Biden holds a solid polling lead, his advantage in many battleground states remains within the margin of error, and state polls are historically less reliable than national polls. …

"So what does it mean for financials if Trump wins? We believe there would be a reinvigorated deregulatory effort. Though the Trump administration and the regulators it appointed have implemented measures to ease rules on banks, asset managers and other financial institutions, they haven't gone as far as most expected when Trump was elected."

Wall Street wants its workers back — MM spoke to a top Wall Street exec late last week who grumbled that he goes out and sees people eating and drinking around Manhattan every night. "If they can do that, why aren't they coming to work?," this person asked.

GOOD MONDAY MORNING — Welcome to the final countdown! There is actually a world in which this election is over, believe or not. Email me on bwhite@politico.com and follow me on Twitter @morningmoneyben. Email Aubree Eliza Weaver on aweaver@politico.com and follow her on Twitter @AubreeEWeaver.

HAPPENING TUESDAY - A GEN Z RISING DISCUSSION: Did you know Gen Z now makes up 1/10th of the electorate? Join a virtual conversation with Mike Brodo, executive director of Gen Z GOP, and Chelsea Miller, co-founder of Freedom March NYC, and other Gen Z voters to find out how young voters are interacting with the political parties, technology and electoral process. Moderated by Laura Barrón-López and Rishika Dugyala, this virtual conversation explores the mindset of Gen Z voters, their policy priorities, and their impact on Election Day. REGISTER HERE.

Driving the Day

DRIVING THE WEEK — Senate expected to send Amy Coney Barrett to the Supreme Court on Monday in one of the fastest confirmations in history … Trump is on the trail all week with stops in Pennsylvania on Monday.

On Tuesday, Trump heads to Michigan, Wisconsin and Nebraska (home of potentially important split Electoral College votes) … Vice President Mike Pence will also stay on the trail despite aides testing positive for Covid-19 … Biden is on the trail as well including an event in Warm Springs, Georgia on Tuesday …

RISING COVID CASES THREATEN ECONOMIC OUTLOOK — Via Reuters: "Global shares got off to a cautious start on Monday as surging coronavirus cases in Europe and the United states threaten the economic outlook, even as growth in China provides some support to Asia.

"The United States has seen its highest ever number of new COVID-19 cases in the past two days, while France also set unwanted case records and Spain announced a state of emergency. That combined with no clear progress on a U.S. stimulus package to pull S&P 500 futures down 0.3%."

SPECIAL RELATIONSHIP UPDATE — Via our Matei Rosca: "U.K. and U.S. regulators see the end of the Brexit transition period as a key moment in the dynamic between their jurisdictions, they said in the official readout of a meeting … Representatives from the top regulators on either side of the Atlantic 'recognized that the UK-U.S. financial regulatory relationship and Working Group discussions will be entering a new phase after the UK's transition out of the European Union is complete.'

"Interestingly, the statement acknowledged the U.S. continues to leave sustainable finance to the private sector, while governments in Europe and elsewhere have taken it upon themselves as a priority."

Sideline: "A Joe Biden win in the U.S. election could mean a change of stance on green banking in Washington, but also on the U.K.'s glorious future as a close partner, as the Irish-American Democrat seems less than infatuated with Boris Johnson's Conservatives."

COVID HITS PENCE-WORLD — Our Anita Kumar: "Vice President Mike Pence's chief of staff, Marc Short, tested positive for Covid-19 on Saturday, a sign of the virus hitting the inner circle of the White House's coronavirus task force with just 10 days left in the 2020 election.

"Pence, who tested negative Saturday, will continue to headline campaign events in the coming days even though the vice president's office acknowledged he 'is considered a close contact' with Short. … Pence is scheduled to travel to … Wisconsin on Monday, part of a frenzied pace of rallies and other events for the vice president and his boss"

BIDEN WINS DEBATE PER NEW POLL — Our Evan Semones: "Biden outperformed … Trump in Thursday's final presidential debate, according to a new POLITCO/Morning Consult flash poll …

"The survey found that 54 percent of debate watchers believed Biden won the matchup, while 39 percent said Trump did. Only 8 percent of those who watched said they didn't know or had no opinion."

Markets

DIVIDEND DARLINGS TRAIL STOCK MARKET — WSJ's Akane Otani and Caitlin McCabe: "Some big-name stocks are sporting chunky dividend yields. Many yield-starved investors are still saying no thanks.

"Companies in the S&P 500 with at least a quarter-century record of paying out and increasing dividends — dubbed 'dividend aristocrats' by Wall Street — have trailed the broader stock market this year. That is even as record-low interest rates have resulted in a scarcity of yield across the world."

THE BIG SHORT IN TREASURIES IS SHOWING SOME PREELECTION CRACKS — Bloomberg's Edward Bolingbroke and Liz McCormick: "Rates traders are starting to question the big short position that's built up in long-maturity Treasuries on the expectation of a Democratic sweep in next month's U.S. elections.

"In the market for options on Treasury futures, trades emerged in the past week that wager against a leap in volatility or a major breakout in yields heading into year-end. Specifically, they benefit from 10-year rates being capped around 1 percent, less than 20 basis points above current levels. Some popped up Friday, after the final presidential debate."

SUBSCRIBE TO TRANSITION PLAYBOOK: We're excited to launch a newsletter written for insiders that will track the appointments, the people, and the power centers of the next administration. Both Team Biden and Team Trump have been working behind the scenes for months vetting potential nominees and drafting policy agendas. Transition Playbook takes you inside those preparations, personnel decisions, and policy deliberations. Don't miss out, subscribe today.

Fly Around

A GLOBAL REBOUND COULD BE DETERMINED BY HOW FREELY HOUSEHOLDS SPEND — WSJ's James Glynn: "Households around the world responded to the coronavirus pandemic and its related effects by sharply boosting their savings. What they do with that cash could help shape the global economic recovery.

"Saving rates in many countries soared last spring as governments pumped stimulus money into people's pockets and consumers trimmed their spending because of business closures, infection fears or lower expenses while working from home. That left many consumers — particularly the middle-income and affluent — with less debt and more cash to burn as restrictions on activities are eased."

TRUMP'S BIGGEST ECONOMIC LEGACY ISN'T ABOUT THE NUMBERS — NYT's Patricia Cohen: "In perhaps the greatest reversal of fortune of the Trump presidency, a microscopically tiny virus upended the outsize economic legacy that Mr. Trump had planned to run on for re-election. Instead of record-low unemployment rates, supercharged confidence levels and broad-based gains in personal income, Mr. Trump will end his term with rising poverty, wounded growth and a higher jobless rate than when he took office.

"Still, despite one of the worst years in recent American history, the issue on which Mr. Trump gets his highest approval ratings remains the economy. It points to the resilience of his reputation as a savvy businessman and hard-nosed negotiator. And it is evidence that his most enduring economic legacy may not rest in any statistical almanac, but in how much he has shifted the conversation around the economy."

RISING RATES SEEM TO SIGNAL A SIGNAL A RECOVERY IS NEAR, BUT INVESTORS AREN'T SURE — CNBC's Michael Santoli: "Bonds, it would seem, are speaking the bulls' language. Treasury yields rolled to a four-month high last week, the 10-year note reaching 0.84 percent, as U.S. economic data continue to arrive generally better than expected and the markets anticipate further fiscal-support worth trillions either sooner or later, under this administration or the next."

TRANSITIONS — "Federal Hall Policy Advisors … announced that Len Wolfson has joined the firm as a Partner after recently serving as Assistant Secretary for Congressional and Intergovernmental Relations at the U.S. Department of Housing and Urban Development and Acting Commissioner of the Federal Housing Administration …

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