| | | | | |  | | By Ben White and Aubree Eliza Weaver | Presented by Harry's | 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. | | | First look: Biden's big challenge — President-elect Joe Biden will have LOTS of challenges when he takes office on January 20. But perhaps the biggest is the massive disparity in how slices of the American economy have recovered from the coronavirus disaster. The top tier? Incredibly well. Almost unscathed, if not significantly richer. The lower-middle and lower income groups? Devastated. With still no sign of a deal for more relief before Christmas. Via an Americans for Tax Fairness study out this morning: "The collective wealth of America's 651 billionaires has jumped by over $1 trillion since roughly the beginning of the COVID-19 pandemic to a total of $4 trillion at market close on Monday, December 7 … "Their wealth growth since March is more than the $908 billion in pandemic relief proposed by a bipartisan group of members of Congress … The $1 trillion wealth gain by 651 U.S. billionaires since mid-March is … more than it would cost to send a stimulus check of $3,000 to every one of the roughly 330 million people in America. A family of four would receive over $12,000." The rich feel good; Others not so much — Via new Morning Consult data out this a.m.: "While higher income consumers have grown more confident for two consecutive weeks, confidence among lower income Americans declined by almost 3 points this week alone, erasing any gains during the week of Thanksgiving. "The divergence in confidence across the income spectrum is likely to intensify absent additional stimulus, as 66% of unemployment recipients are set to see their benefits expire by the end of December." Damage already done — Even if Congress does finally manage to get to an agreement for another round of stimulus before the end of the year, the damage is already done and the economy is already slowing. So Biden will have to contend with that no matter what happens the rest of this week. Via HFE's Rubeela Farooqi: "Widespread vaccinations would no doubt make it possible for a more complete reopening and a stronger rebound in growth. But given the damage already done, complete recovery, especially in the labor market, may not occur for a while … "While news of a vaccine is positive, a resurgence of virus transmissions is a concern, especially for small businesses. That was evident in the bigger-than-expected decline in the NFIB small business" GOOD WEDNESDAY MORNING — 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 Harry's: Introducing Harry's new, sharper blades: From past experience with other brands, we've grown used to razor innovations often leading to higher price tags. Not this time around. Men's grooming startup Harry's just came out with their sharpest blades ever—without raising prices, breaking the traditional pattern of upcharging used by many razor companies. Learn more about Harry's new, sharper blades and how you can give them a try, 100% risk-free. | | | | | | TRUMP BACKS STIMULUS CHECKS — Our Burgess Everett: "President Donald Trump is getting behind a second round of stimulus checks, even as several of the leading coronavirus relief bills leave out new direct payments to Americans. "Sen. Josh Hawley (R-Mo.) has spoken repeatedly to the president about the matter, including on Tuesday afternoon. He said that Trump will likely support at least $1,200 in payments for individuals, and could even go higher. … Hawley has urged Trump to veto any bill that lacks direct payments, and he said the president listened to his argument." VACCINE CLIFF AHEAD? — Our Sarah Owermohle: "The United States could be heading for a vaccine cliff this spring, with shortages forcing hundreds of millions of Americans to wait for shots amid intense global competition for limited doses. "The Trump administration has bought 100 million doses each of vaccines from Pfizer and Moderna, but the U.S. is unlikely to get additional doses anytime soon because of strong international demand. And both vaccines require two doses per person, effectively halving the already scarce supply. … [M]ost Americans' best hope of getting a shot by spring or early summer may rest on vaccines that have not yet been proven to work — such as the doses being developed by Johnson & Johnson and AstraZeneca." TRUMP COULD FACE FIRST VETO OVERRIDE — Our Connor O'Brien: "The House overwhelmingly passed annual defense policy legislation … in the face of a veto threat from President Donald Trump. Members easily approved the annual National Defense Authorization Act in a blowout 335 to 78 vote. "The total far exceeds the two-thirds majority needed to overturn Trump, who is threatening to nix the $741 billion bill because it doesn't include a repeal of legal liability protections for social media companies. The bill now heads to the Senate, which is expected to soon vote and send the measure to Trump's desk." FUDGE TO HEAD HUD — Our Katy O'Donnell, Megan Cassella, and Tyler Pager scooped: "Biden has selected Rep. Marcia Fudge to lead the Department of Housing and Urban Development … If confirmed, Fudge would be the first Black woman to run the $50 billion department. "The offer to lead the housing agency comes after weeks in which Fudge launched a bid to become the first Black female Agriculture secretary. Fudge, a member of the House Agriculture Committee, and her allies in the Congressional Black Caucus had lobbied openly for the USDA job. Biden is now leaning toward choosing former Obama agriculture secretary Tom Vilsack, however" | | | |   | | | | | | STEADY GAINS FOR STOCKS DELIVER MORE RECORDS ON WALL STREET — AP's Damian J. Troise and Alex Veiga: "Steady gains throughout the day delivered another round of record highs for major indexes on Wall Street .. The S&P 500 rose 0.3%. The tech-heavy Nasdaq also hit a record high. "Small-company stocks rose much more than the rest of the market, a signal that investors are feeling more optimistic about the economy. The gains, which came after a shaky start for the market, came as the U.K. became the first Western country to start a mass vaccination program. U.S. regulators have given a positive initial review of the vaccine and a decision to allow its use is expected within days." FLOOD OF DAY TRADERS STRAINS ONLINE BROKERS — Bloomberg's Annie Massa: "The trouble began about 9 miles northwest of the New York Stock Exchange, in a squat, unremarkable building. There, inside a critical data node in the U.S. financial system, a crucial piece of hardware failed. "Like a downed electrical line in some faraway corner of the power grid, that breakdown effectively turned the lights out for a swath of investors across the nation. Irate traders woke up to discover they'd been locked out of their accounts at one of the nation's leading electronic brokers, Interactive Brokers Group Inc." NEW EXCHANGE FOR SMALL TRADERS HAS TURNED U.S. TREASURIES UPSIDE DOWN — Bloomberg's Elizabeth Stanton: "A fledgling futures market backed by Chicago trading giants including Citadel Securities just rolled out a contract that turns the U.S. Treasury market on its head. The Small Exchange product rises when the yield on 10-year notes increases, and falls when the rate decreases. That's novel. Although investors globally fixate on Treasury yields, the dominant derivatives they could previously buy track the inverse: the price of bonds." | | | | A message from Harry's: Harry's just came out with its sharpest blades ever. But what do sharper blades mean for you? Well, guys who shave four times a week say that, with Harry's new blades, their eighth shave is as smooth as their first. And yet, Harry's didn't raise prices—not even a little. Harry's new, sharper blades are (still) just $2 each for an 8-pack. But you don't have to take our word for it. Snag a Trial Set and decide for yourself. (And remember: if you don't love your shave, just let them know and get a full refund. That's their 100% Quality Guarantee at harrys.com). | | | | | | FITCH SAYS UPGRADES OF MAJOR ECONOMIES UNLIKELY IN 2021 — Reuters Kanishka Singh: "Fitch Ratings told Reuters on Tuesday that upgrades of any major economy are unlikely in 2021 despite recent developments related to COVID-19 vaccination, and that countries in Latin America, the Middle East and Africa show the highest level of vulnerability to further negative action in the coming year. "'We have only two sovereign ratings (Cote d'Ivoire and New Zealand) on Positive Outlook so upgrades of any major economies currently look unlikely in 2021,' Tony Stringer, chief operating officer of the rating agency's Global Sovereigns and Supranationals, said in an emailed response to questions posed by Reuters." WORLD BANK CHIEF SEES SLOW GLOBAL RECOVERY FROM COVID-19 — WSJ's Yuka Hayashi: "It will take two to three years for global output to return to pre-pandemic levels as many developing nations slowly climb out the coronavirus-induced slump with the help of vaccines, World Bank President David Malpass said. "While advanced economies are recovering more quickly than projected, many developing economies have lagged behind as tourism declined and remittances from their workers based in rich countries dried up, he said in an interview at The Wall Street Journal's CEO Council summit on Tuesday. And even in the developing world, the recovery has been uneven." | | | | LISTEN TO THE NEW SEASON OF GLOBAL TRANSLATIONS PODCAST: Our Global Translations podcast, presented by Citi, examines the long-term costs of the short-term thinking that drives many political and business decisions. The world has long been beset by big problems that defy political boundaries, and these issues have exploded over the past year amid a global pandemic. This podcast helps to identify and understand the impediments to smart policymaking. Subscribe for Season Two, available now. | | | | | WELLS FARGO CEO SAYS BANK WILL ROLL OUT NEW REPORTING METRICS NEXT MONTH — Reuters' Imani Moise: "Wells Fargo & Co Chief Executive Officer Charlie Scharf said on Tuesday that the megabank will debut new financial reporting metrics in January to give better insights into its performance. Scharf began implementing sweeping changes across the fourth-largest U.S. bank shortly after joining the firm last October and is hoping to be able to report tangible changes next year." GOLDMAN SACHS PLANS TO BUY OUT ITS CHINESE PARTNER — NYT's Keith Bradsher: "Goldman Sachs has reached a deal to buy out the minority partner in its Chinese securities joint venture, which could make it the first global bank to assume full ownership of its securities business in mainland China since the Communist Party took control of foreign-owned enterprises in the country in the 1950s. "In a memo to employees on Tuesday, the Wall Street bank said it had reached a definitive agreement to buy a 49 percent stake in Goldman Sachs Gao Hua still held by its local partner, Beijing Gao Hua Securities. Goldman Sachs did not disclose a price for the transaction." S&P REVISES NEW YORK CITY DEBT OUTLOOK TO NEGATIVE — Reuters: "S&P Global Ratings on Tuesday switched its outlook on New York City debt to negative from stable due to uncertainties stemming from a recent uptick in the virus transmission rate. The revision relates to the city's general obligation and associated appropriation-backed bonds and reflects a one-in-three chance S&P could lower its rating during the outlook period, which typically spans two years, the rating agency said." | | | | HAPPENING THURSDAY - CLOSING THE ORAL HEALTH CARE GAP : Oral health care remains out of reach or limited for millions of people living in the United States, particularly for those with low income, those living in rural communities, and in communities of color. What will it take to improve access and quality of oral care for Americans, especially for the most vulnerable? Join POLITICO for a virtual conversation exploring the challenges in oral care disparities and the policies and strategies that can help solve them. REGISTER HERE. | | | | | | | | | Follow us on Twitter | | | | Follow us | | | | |
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