Wall Street rocks as food lines grow

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Wall Street rocks as food lines grow – MM is not a big fan of the stock market’s arbitrary round number celebrations (although we still have a 20K Dow hat.) But it should be noted that we are getting closer to the Thanksgiving holiday as the Dow hits 30K, after to have dived at 18K in Mars is a remarkable moment in our history. And it highlights the biggest challenge President-elect Joe Biden faces as he prepares to enter the White House.

The top of the US economy rocks. Those of us fortunate enough to work in jobs that we can do remotely have generally done well during the pandemic, but maybe not psychologically. Underneath, Americans are suffering terribly with the growth of food lines and jobless claims still at record levels (which they will likely reach even today).

There is hope on the horizon with three very promising vaccines. But there is more pain to come, especially with no further stimulus from Washington until at least the end of January. Biden’s presidency will increase or decrease in its ability to bend Washington to the task of helping unravel the continuing march of economic inequality.

This will likely mean enough free market Republicans in the Senate to kick off another major round of federal aid while assuring them that once we slip out of the viral grip he will take a look at the economy taking off from it. – even, which she could very well. once we get to spring. There are many pivotal moments in American history. We are facing it now. And the Biden team knows that very well.

GOOD WEDNESDAY MORNING – Happy Thanksgiving everyone. MM is dark until Monday. May this be the last time we have to spend apart from those we love. Send me an email on [email protected] and follow me on Twitter @morningmoneyben. Email Aubree Eliza Weaver on [email protected] and follow her on Twitter @AubreeEWeaver.

Huge explosion of economic data today ahead of the holiday weekend. The second estimate of Q3 GDP will likely change little from the initial estimate of 33.1%. The fourth quarter will be much worse and the first quarter of next year could turn negative again. …

Initial 8:30 am jobless claims are expected to drop only slightly to 730K from 742K, still well above the previous all-time high… Univ. of Michigan consumer sentiment at 10:00 am is expected to drop to 77.0 from 81.8 …

MORE YELLEN REACT – Ian Shepherdson from the Pantheon: “[A] It’s hard to imagine a more secure pair of hands – but that doesn’t change our opinion that the next Covid relief bill will be modest if Republicans still control the Senate …

“As Secretary of the Treasury, Dr Yellen will have a powerful intimidating chair, alongside Fed Chairman Powell to advocate for increased fiscal action. But if the Republicans are still in the driver’s seat, the key decisions will be made by Majority Leader Mitch McConnell.

Emails from Law Professor George Mason, JW Verret: “From 2013 to 2015, I led the staff work for the internal oversight of the Fed under the leadership of President Hensarling. We pushed President Yellen on rules-based monetary policy, cost-benefit analysis in regulation, and Bagehot-style limits on lending 13 (3).

“These debates seem strange in Trump’s day. I’m glad to see our old opponent get this job. She will have an equal hand at the helm, she cares about free trade, she will do well. Clear case for confirmation. “

BIDEN TAMPS DOWN TALK OF WARREN / SANDERS IN CABINET – Our Matthew Choi: “Biden said… he wanted to keep some of his former progressive rivals in the Senate, further tempering the hopes of Sen. Bernie Sanders or Elizabeth Warren joining his administration.
Speaking to NBC News’ Lester Holt, Biden said the two former Democratic presidential candidates were critical in advancing his progressive agenda in Congress and that his administration already had “ significant representation among progressives. ”

“Yet,” he said, “there is nothing really off the table”. “ Getting someone out of the Senate, removing someone from the House, especially someone important, is a really tough decision that should be made, ” Biden said. “I have a very ambitious, very progressive program. And it will take very strong leaders in the House and Senate to achieve this. “”

BIDEN CLIMATE AGENDA – Our Zachary Warmbrodt and Debra Kahn in The Long Game newsletter: “Much of… Biden’s political agenda depends on which party controls the Senate… But when it comes to tackling the risks of climate change in the financial system – a high priority for many Democrats – even a divided Congress won’t stand in the way.

“Policymakers and experts believe that independent financial regulatory agencies in the United States have ample power to speak out against the looming economic dangers posed by rising temperatures and devastating natural disasters. Some of the work is already being done by those Trump appointees and is only expected to pick up steam after Biden is inaugurated.

DOW 30,000 LADDERS – Reuters’ Chuck Mikolajczak: “US stocks rebounded on Tuesday and the Dow Jones crossed the 30,000 threshold for the first time, as investors anticipated an economic recovery in 2021 on the progress of the coronavirus vaccine and clearance formal for President-elect Joe Biden’s transition to the White House. Of the top 11 S&P sectors, 10 gained ground, led by economically sensitive stocks such as financials, materials and energy, while industrials hit a record. ”

But how did it happen? – Stan Choe of the PA: “The Dow’s 30,000 rocket turn was heavily stimulated by the Federal Reserve, which cut short-term interest rates to around zero and took other steps to stabilize the financial markets; and Congress, which has secured billions of dollars in financial assistance to the economy.

“The economy has improved since the initial shock of the pandemic. For example, claims for unemployment benefits rose from 6.9 million in March to 742,000 last week. The company’s profits were not as large as initially feared. And the possibility that a COVID vaccine could start distribution by the end of the year has recently given the market more reason to be optimistic.

MNUCHIN PUT $ 455B IN FUNDING OUTSIDE YELLEN’S EASY REACH – Bloomberg’s Saleha Mohsin: “Treasury Secretary Steven Mnuchin to put $ 455 billion of unspent funds under the Cares Act into an account his alleged successor, former Federal Reserve Chairman Janet Yellen, will need of congressional authorization to use.

“Mnuchin plans to put the money into the agency’s general fund,” a Treasury Department spokesperson said Tuesday. This fund can only be operated “with an authority based on legislation issued by Congress,” according to the Treasury website.

YELLEN HAS EXCELLED AT LARGE JOBS, BUT IT WILL BE THE HARDEST – NYT’s Neil Irwin: “If confirmed by the Senate as Secretary of the Treasury, Janet Yellen will be among the most accomplished people to take over the great office at 1500 Pennsylvania Avenue in the department’s 231 year history. Few people at any given time have served at the highest levels of economic policy making for so long and with so much distinction.

“Among other things, she will be the first person to have been the chief economist of the White House and head of the Treasury and the Federal Reserve. At the Fed, she played a major role in engineering the longest economic expansion in U.S. history, interrupted only by the pandemic.

YELLOW CONFRONTED WITH COOLING RECOVERY, STIMULATES UNSURE – Kate Davidson of the WSJ: “Janet Yellen, President-elect Joe Biden’s candidate for Treasury Secretary, will face an economic recovery that appears to be losing momentum and uncertain prospects of further stimulus from Congress.

If confirmed by the Senate, Ms Yellen would play a key role in promoting additional aid for an economy hit by the coronavirus pandemic and associated closures, particularly if Congress is unable to reach agreement on a back-up plan before Mr. Biden takes office. January 20.

FED’S BULLARD SEES ‘THE LIGHT AT THE END OF THE TUNNEL’ – Reuters: “St. Louis’ Federal Reserve Chairman James Bullard said on Tuesday that recent developments regarding the success of several coronavirus vaccine candidates suggested an end to the health and economic crisis could be in sight.

“” It seems to me that there is light at the end of the tunnel, “Bullard told reporters after a presentation at an event hosted by the Bank of Finland.” As for being able to see the end of the crisis , that’s a very realistic view at this point. Bullard also said that while some recent economic data has not been as strong as it had been earlier in the fall, nonetheless, “ until ‘ now I think we are resisting. ”

WILLIAMS: THE FED CAN RESTART EMERGENCY LOANS IF NECESSARY – Michael S. Derby of the WSJ: “The Federal Reserve is well prepared to navigate the difficult path for the US economy to recover from the effects of the coronavirus pandemic, and the central bank may resume its emergency lending efforts if it deems it necessary, Federal Reserve Bank of New York President John Williams …

“We are still in a deep recession” with high unemployment and an economy far from strong despite its recent dramatic rebound, Williams said at a virtual event hosted by The Wall Street Journal. ”

CFTC CHIEF: COMPANIES MAY BE CLOSED FROM TRADE IN CASE OF LIBOR ISSUE – William Shaw and Silla Brush of Bloomberg: “A significant number of asset managers risk being shut out of the interest rate swap market early next year unless they sign a new designed protocol to ease the transition away from Libor, warned the chairman of the US Commodity Futures Trading Commission.

“With the London Interbank Offered Rate to be phased out at the end of 2021, market participants are encouraged to adopt standardized language by January that will convert Libor-linked contracts to an alternative benchmark rate once the benchmark will expire. ”

GLITCHES HIT TRADING PLATFORMS MANAGED BY BOFA, VANGUARD – Alexander Osipovich from WSJ: “Popular trading platforms operated by Bank of America Corp., TD Ameritrade Holding Corp. and Vanguard Group suffered from issues on Tuesday that made them inaccessible or slow to use, frustrating investors on a historic day for the US stock market.

“The snafus started when markets opened at 9:30 am ET, before the Dow Jones Industrial Average first broke 30,000, according to technical service tracker Downdetector.