| | | | | |  | | By Ben White and Aubree Eliza Weaver | Presented by |  | | | 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. | | | Welcome to the Joe Biden era — Pay little heed to the legal "strategies" emanating from the Trump White House. President-elect Joe Biden will take office in January. Senior people close to Trump tell Morning Money everyone inside the president's orbit knows the game is over but can't really convince the president of that fact. But the rest of the world is moving on and gaming out what a Biden White House (probably facing a split Congress) will do and who will fill top jobs. Wall Street has largely embraced the Biden win and the prospect of divided government even though it likely means less immediate fiscal stimulus. Investors tell Morning Money that while a blue wave that delivered huge immediate fiscal relief might have been the best case scenario, a moderate Biden presidency checked by a GOP Senate (barring Democrats sweep the Georgia runoffs) is not a terrible alternative. That view could change if the current spike in Covid-19 cases turns into broad-based lockdowns. That would make hefty stimulus an even bigger economic necessity with no guarantee Washington could make it happen. But for now, markets take solace in the idea that a Republican Senate will force Biden into moderate nominees (aka no Elizabeth Warren at Treasury) and policies. The left wants Biden to use the Vacancies Act to populate the administration with strong progressives. That's just not likely to happen. Biden is an institutionalist bent on cutting deals with Republicans. Slamming in nominees on a temporary basis would undercut everything he wants to do and be totally out of character for the incoming president. Compass Point's Isaac Boltanksy: "It will take until January to know which party controls the Senate, but even in the best-case scenario for Democrats, there will be a 50-50 tie that gives moderate red state Democrats a considerable amount of legislative latitude." Top tweet from former Trump NEC director Gary Cohn: "Congrats to President-elect @joebiden and Vice President-elect @kamalaharris. I wish them great success in leading our country. With over 145M votes cast, both campaigns should be applauded for getting an unprecedented number of citizens engaged in the democratic process." GOOD MONDAY MORNING — Well we did it. We somehow survived the 2020 campaign and long wait for a presidential call. Now we gird our loins for the transition, which you can follow in this awesome new POLITICO newsletter chronicling every step. If you have thoughts on potential Biden nominees for top economic and financial regulatory posts we absolutely want to hear them. 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. | | | | A message from Altria: Moving beyond smoking. Altria's companies are leading the way in moving adult smokers away from cigarettes – by taking action to transition millions toward less harmful choices. We are investing in a diverse mix of businesses to broaden options beyond traditional, combustible cigarettes. See how we're moving. | | | | | | DRIVING THE WEEK — Markets get their first chance to fully respond to the Biden win and futures action (as noted above) suggested they will be just fine with it. But given the Covid-19 situation and Trump legal fights, volatility is likely to continue to rule. Biden plans to convene his Covid-19 taskforce on Monday as the transition process begins in earnest. Federal Reserve Vice Chair Randy Quarles, Acting Comptroller Brian Brooks and FDIC Chair Jelena McWilliams testify at 2 p.m. Tuesday before Senate Banking on financial oversight. BANKERS EMBRACE SPLIT POWER — Our Zachary Warmbrodt: "Bankers, who had been bracing for the prospect of Democrats taking full control of Washington, are looking forward to a divided federal government." "Industry representatives say they welcome the possibility of the Republicans maintaining control of the Senate in a … Biden presidency, saying a split government could still deliver much-needed relief for the economy while avoiding a regulatory crackdown that would loom if Democrats won everything." | 
Drew Angerer/Getty Images | | | | | TRACK THE TRANSITION, SUBSCRIBE TO TRANSITION PLAYBOOK: The definitive guide to what could be one of the most consequential transfers of power in American history. Our Transition Playbook newsletter—written for political insiders—tracks the appointments, people, and power centers of the new administration. Don't miss out. Subscribe today. | | | | | JOBS REPORT REWIND — Apollo's Torsten Slok: "Employment in October is still 10 million jobs lower than in February, and job growth continues to flatten out … The sideways movement in the economy will continue until we have a vaccine or a significant fiscal expansion." Pantheon's Ian Shepherdson: "October payrolls surprised us to the upside, prompting a wave of chatter from the commentariat to the effect that the labor market is healing. Well, it was healing, in the week ended October 17." "But state and local governments are under great financial pressure, so it's very hard to be optimistic about the trend in payrolls in the sector, even if November sees something of a rebound." GENSLER ON THE TRANSITION TEAM — Also via Zach: "Gary Gensler, a former Obama administration official best known for cracking down on Wall Street banks, will join Joe Biden's presidential transition team and lead its review of financial regulatory agencies "Gensler's involvement will likely calm the nerves of progressives who want Biden to take a hard line with the finance industry. The former Goldman Sachs partner faced off with the banking industry as chair of the Commodity Futures Trading Commission from 2009 to 2014, guiding the agency as it imposed new rules on Wall Street trading after the 2008 financial crisis." BIDEN'S CHALLENGE — Mohamed A. El-Erian on Bloomberg Opinion: "Even before any new renewed Covid-19 restrictions, U.S. economic data has continued to point to a deceleration. The inequality trifecta – of income, wealth and opportunity – is also worsening, adding to social tensions and an erosion in the country's longer-term growth and prosperity potential." | | | |   | | | | | | REBOUNDING CORPORATE PROFITS FORTIFY STOCK RALLY — WSJ's Karen Langley: "Big U.S. companies have trounced expectations this earnings season, potentially laying the foundation for the next leg of the stock market's rally as investors look beyond the election. With most of the companies in the S&P 500 reporting, analysts are projecting third-quarter profits fell 7.5 percent from a year earlier, according to FactSet. That is a sharp improvement from the 21 percent decline they forecast at the end of September." FIRST MARKET REACTION TO BIDEN SIGNALS HOPE FOR HEALING — Bloomberg's Filipe Pacheco: "Stock markets in the Middle East, the first to trade after Joe Biden's victory in the U.S. election, are signaling bets the new president will reduce international conflict and push for peace in the region." "That optimism outweighed concern that his clean-energy drive could imperil the fortunes of countries whose economies are founded on oil and gas. Stocks in Dubai posted their biggest three-day rally since August. Saudi Arabia extended the longest streak of gains since Oct. 13. The Kuwait gauge closed above its 50-day moving average, while Oman stocks had the first back-to-back advance in a month. Israel's main index rose to a two-month high." WALL STREET WANTS TO BE SURE BIDEN CAN KEEP WARREN'S ARMY AT BAY — Bloomberg's Robert Schmidt, Jesse Hamilton and Yalman Onaran: "Wall Street has made its peace with a Joe Biden victory, taking comfort in his decades-long political career in which moderation is a prevailing trait. But it's nervous about his more liberal allies. Finance executives will be closely watching how Biden handles the coming internal Democratic fight between centrists and progressives that threatens to increase regulation and dent profits." | | | | A message from Altria: Moving beyond smoking. Altria's companies are leading the way in moving adult smokers away from cigarettes. Today, we are taking action to transition millions toward less harmful choices.
From cigarettes to innovative alternatives. By investing in a diverse mix of businesses, Altria is working to further broaden options. Our companies are encouraging adult smokers to transition to a range of choices that go beyond traditional, combustible cigarettes.
From tobacco company to tobacco harm reduction company. And while Altria is moving forward to reduce harm, we are not moving alone. We are working closely with FDA and other regulatory bodies, and will work strictly under their framework.
See how we're moving. | | | | | | EVIDENCE OF PPP FRAUD MOUNTS — WSJ's Ryan Tracy: "The federal government is swamped with reports of potential fraud in the Paycheck Protection Program, according to government officials and public data, casting a shadow on one of Washington's signature responses to the coronavirus pandemic. "Congress and the Trump administration designed the PPP to give small businesses fast and easy access to taxpayer funds, and it worked: About $525 billion in loans were distributed to 5.2 million companies between April 3 and Aug. 8. Many business owners say it was a lifeline in turbulent times. But evidence is growing that many others took advantage of the program's open-door design." BIDEN RETURNS TO BATTLE ANOTHER ECONOMIC CRISIS (BUT IT'S NO GREAT RECESSION) — Reuters' Ann Saphir and Jonnelle Marte: "Joe Biden is returning to the White House to lead the United States in the midst of an economic crisis after beating President Donald Trump in Tuesday's election, a turn of events likely to conjure an eerie sense of deja vu for the Democratic former vice president." "Unlike in 2008, when the country elected Democrat Barack Obama and his running mate Biden as the global economy teetered from the sub-prime mortgage crisis and collapse of the Lehman Brothers investment bank, the worst of the current economic downturn may have passed already, economists and analysts say." | | | | KEEP UP WITH THE WORLD FROM HOME: Our Global Translations newsletter, presented by Bank of America, layers international news, trends, and decisions with contextual analysis from the world's sharpest minds. At a time when traveling is a challenge, we can bring the world to you. For news, insight, and a unique perspective that you cannot find anywhere else, SUBSCRIBE TODAY. | | | | | Could the Biden economy be more of the same slog as the Obama economy? — NYT's Neil Irwin: "The way things are shaping up, the Biden economy appears likely to show uncanny similarities to the 2011-to-2016 Obama economy. Joe Biden will be inaugurated in January amid an economy that is likely to be slowly recovering from collapse." "The Senate will probably be in the hands of Republicans — an opposition party perhaps willing to do enough to try to prevent steep damage to the economy and markets, but unwilling to embrace the kind of multi-trillion dollar spending agenda that could generate a Biden boom. This combination would mean that the Federal Reserve would be left playing the dominant role in trying to propel an economic recovery, with the downsides that would entail." TRADERS LOOK FOR POST-ELECTION RESET — Bloomberg's Justin Carrigan and Benjamin Purvis: "After a week in which markets barely had time to draw breath as Joe Biden inched toward victory in the U.S. presidential election, traders have begun to dive right back in with the euro and Australian dollar among currencies climbing versus the greenback." "The Democratic challenger's win over President Donald Trump was declared by media networks on the weekend and the broad verdict is that a Biden administration will be a positive for riskier assets. This is in part because more predictable policies may help buoy global trade." | | | | Follow us on Twitter | | | | Follow us | | | | |
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