THE TICKER

Goldman Sachs is popping up in some unexpected places — namely, the 2020 presidential campaign trail. 

The Wall Street giant is seeking a rebrand by hosting forums for the candidates focused on small-business issues, as I wrote over the weekend

The bank, through its “10,000 Small Businesses” program, has underwritten six of the events so far in Iowa and New Hampshire — including with former vice president Joe Biden, Sens. Kamala D. Harris (D-Calif.), Michael F. Bennet (D-Colo.), Cory Booker (D-N.J.) and Amy Klobuchar (D-Minn.). 

But not everybody’s showing up: Sens. Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.) both are declining to participate. “This is exactly what Sen. Sanders means when he talks about a corrupt political system,” spokesman Mike Casca said via email. 

Goldman execs say the initiative is aimed at elevating small business issues in a presidential contest that has so far given them short shrift. 

From the story: 

Goldman Sachs’s executive vice president, John F.W. Rogers, chair of the firm’s foundation, which underwrites both the 10,000 Small Businesses program and the forums, said the events are “about putting this on the agenda of the candidates. I haven’t seen anybody say, ‘Here’s my plan for small business in America. Here’s how I’m going to address the regulations they face, the need for capital.’”

“There seems to be a frustration that nobody thinks about the issues that challenge them,” Rogers said. “I hope some of these businesses will grow one day to become big enterprises and do business with Goldman Sachs,” but the firm has no direct economic stake in the program.

But the firm is also using the events to deepen its ties to the candidates, sending lobbyists from its Washington office to greet them. For the Harris event — which I attended in Ankeny, Iowa outside Des Moines — it was Joyce Brayboy, onetime chief to staff to former congressman Mel Watt (D-N.C.) who has worked for Goldman for more than a decade. 

“This is the tip of the spear of Goldman’s whole strategy to reintroduce itself to America as a retail bank that cares about Main Street, rather than a global bank that was engaged in decades of illegal conduct that had devastating consequences for families across the country,” said Dennis Kelleher, president of Better Markets, which advocates tougher regulation of the financial services industry. “This is one of the biggest banks in the world staging candidate forums not just as brand enhancement but also to put on their best face with the next president, who will be picking their regulators.”

The firm launched the “10,000 Small Businesses” program nearly a decade ago with the goal of putting that many entrepreneurs through an accelerated training in how to improve and grow their businesses. Some 9,100 have graduated, as the program grew from a pilot project at LaGuardia Community College in Queens to 19 locations, including three state-wide programs, and a national cohort. The firm decided to stage the presidential forums after it held a summit in early 2018 for graduates of the program, and 2,000 of them showed up. 

Veteran Iowa political journalist David Yepsen, who moderates the forums in the Hawkeye State, said Goldman has no input into his questions. And financial regulation hasn’t come up. But the firm’s involvement is impossible to miss. More from the story: 

The event was introduced by Des Moines Area Community College president Ron Denson, who touted the small-business program’s record helping its graduates expand their operations. Then the crowd heard from Elizabeth Hoppe, a coffee shop owner from Emmetsburg, Iowa, who credited her participation with enabling her to open a second location. She also thanked the bank for its “investment in small business and for providing these opportunities to discuss issues that impact our community.”

On the same stage, in July, Booker name-checked Goldman’s small-business effort as a model that should be expanded. “That shouldn’t be the exception; that should be the rule,” he said, “because we know the majority of our jobs that are being created in America are jobs being created by small businesses.”

MARKET MOVERS

Black Friday spending sets record: “Black Friday shoppers spent $7.4 billion online, the second largest Internet shopping day ever, according to data compiled by Adobe Analytics,” CNBC’s Alex Sherman reports.

“The $7.4 billion marked the biggest sales day ever for Black Friday and trailed only last year’s Cyber Monday’s $7.9 billion for the number 1 spot of all-time in online revenue, according to Adobe’s data. The average order value per consumer, at $168, was up nearly 6% year-over-year and also set a new Black Friday record. Adobe Analytics measures transactions from 80 of the top 100 U.S. online retailers.”

U.S. hold on services economy slips. WSJ's Paul Kiernan: "Over the past half-century, the U.S. has evolved from an industrial superpower into the undisputed champion of the global services economy. From 2003 to 2015, the U.S. trade surplus in services such as medical care, higher education, royalties and payments processing nearly sextupled to $263.3 billion. Growth has since stalled, however. Exports of services barely rose in the first nine months of 2019, while imports increased 5.5%. The services surplus, at $178.5 billion through September, was down 10% from the same period last year, on pace for its steepest annual decline since 2003.

"Some of the softness in service exports likely reflects cyclical factors, such as a strong dollar or slowing foreign economies. But economists say the decline in the surplus is difficult to pin exclusively on such issues. They point to other forces—some political, others more tectonic—that are weighing on exports while prompting American consumers and firms to buy more foreign services."

JPMorgan: Global economic pickup, mediocre returns ahead. Bloomberg News's Joanna Ossinger: "JPMorgan Chase & Co. strategists see next year’s expected global economic pick-up generating sub-par returns across the fixed-income, currency and commodity complex. Developed-market bonds, as might be expected, will be laggards, with JPMorgan projecting losses in the single-digit percent range. More surprising might be the single-digit losses in commodities. Investors will get gains elsewhere, but not to the same extent typically registered in economic rebounds, the bank says."

The kingdom will push for an extension of oil production cuts through mid-2020 at a producers’ summit this week in an effort to prop up Saudi Aramco’s IPO share price, Persian Gulf officials said.
WSJ
Business
A decade of historically low interest rates has allowed companies to sell record amounts of bonds to investors.
David Lynch

TRUMP TRACKER

TRADE FLY-AROUND:

China wants tariff rollback: “Beijing’s top priority in any phase one trade deal with the United States is the removal of existing tariffs on Chinese goods, China’s Global Times newspaper reported on Sunday, amid uncertainty on whether the two sides can end a 17-month trade war that has depressed global growth,” Reuters reports.

“Global Times, published by the official People’s Daily newspaper of China’s ruling Communist Party, also cited another unidentified source close to the talks as saying U.S. officials had been resisting such a demand because the tariffs were their only weapon in the trade war and giving up that weapon meant ‘surrender.’”

  • Meanwhile, China's economy is showing new signs of strenghth. WSJ: "After months of slowdown, China’s economy showed signs of stabilizing, while Beijing said it won’t compete with other nations in easing policy. Surveys of manufacturers point to improving confidence and demand last month. The private Caixin manufacturing purchasing managers index rose to 51.8 in November from 51.7 in October, Caixin Media Co. and research firm Markit said Monday. China’s official manufacturing PMI, released Saturday, rose to 50.2 from 49.3. A figure above 50 represents expansion; below 50, contraction."
  • And it is deepening its ties to Russia: “An 1,800-mile pipeline is set to begin delivering Russian natural gas to China [today]. The $55 billion channel is a feat of energy infrastructure—and political engineering,” the Wall Street Journal’s Georgi Kantchev reports. “Russia’s most significant energy project since the collapse of the Soviet Union, the Power of Siberia pipeline is a physical bond strengthening a new era of cooperation between two world powers that have separately challenged the U.S.”

— Huawei is doing just fine without American-made parts: “American tech companies are getting the go-ahead to resume business with Chinese smartphone giant Huawei Technologies Co., but it may be too late: It is now building smartphones without U.S. chips,” WSJ’s Asa Fitch and Dan Strumpf report.

“Huawei’s latest phone, which it unveiled in September—the Mate 30 with a curved display and wide-angle cameras that competes with Apple Inc.’s iPhone 11—contained no U.S. parts, according to an analysis by UBS and Fomalhaut Techno Solutions, a Japanese technology lab that took the device apart to inspect its insides. …  Huawei has made significant strides in shedding its dependence on parts from U.S. companies. (At issue are chips from U.S.-based companies, not those necessarily made in America; many U.S. chip companies make their semiconductors abroad.)”

Olive oil market struggling even before tariffs kick in:  “A prolonged slump in olive-oil prices is whipping up discontent among farmers in southern Europe and North Africa,” WSJ’s Joe Wallace and Adria Calatayud report. “A prolonged slump in olive-oil prices is whipping up discontent among farmers in southern Europe and North Africa.”

“A rich olive harvest in Spain, the world’s dominant producer, has left the market flooded with olive oil. The glut comes just as demand is set to slow in the U.S., the biggest importer of the product, after President Trump in October imposed a 25% tariff on olive oil coming from Spain. The tariff was part of a package of levies designed to retaliate against the European Union for giving subsidies to plane-maker Airbus SE.”

The president has made a trade agreement that caters to his opposition — and that’s why it stands a chance of passing Congress.
NYT

IMPEACHMENT MINUTE:  A speed read on the latest from the congressional impeachment inquiry.

"Trump’s counsel says president won’t participate in House Judiciary’s first impeachment panel, calling it unfair." By The Post's Mike DeBonis and Felicia Sonmez 

"Ukraine’s Zelensky is making headway against corruption. But the fight risks angering Trump." By Michael Birnbaum and David L. Stern 

"Sen. Kennedy says both Ukraine and Russia interfered in 2016 election, despite intelligence community’s assessment." By Sonmez 

"Committee to meet Tuesday to approve release of Ukraine report." By DeBonis and Karoun Demirjian

POCKET CHANGE

Cable execs not worried about 5G: “For about the last two decades, the cable industry has been fueled by three revenue streams: cable television, landline phones and high-speed broadband. … Recently, though, cable’s prized triple play has started to erode,” CNBC’s Alex Sherman reports.

“Investors don’t appear concerned. Cable internet has high profit margins and growth has been so strong that the two largest U.S. cable companies, Comcast and Charter, are both trading near record highs even as their business is fragmenting. Comcast added 379,000 residential high-speed broadband customers last quarter, its strongest third quarter in a decade. … While 5G is generating a ton of buzz for its ability to supposedly handle the massive amounts of data coming from artificial intelligence workloads and self-driving cars, the technology has limitations when it comes to replacing cable infrastructure.”

U.S. asks UK to extradite tech billionaire: “The United States has formally requested the extradition of Michael Lynch, the British tech billionaire who sold his company to Hewlett Packard in an ill-fated $11.1 billion deal, to face charges including securities fraud, wire fraud and conspiracy,” Reuters’s Paul Sandle and Jonathan Stempel report.

“Lynch, once hailed as Britain’s answer to Bill Gates, is currently battling the American IT giant in London’s High Court. HP is seeking damages of $5 billion from Lynch and his former chief financial officer Sushovan Hussain, alleging that they inflated the value of their data firm before selling it. Lynch has denied the accusations, saying HP mismanaged the acquisition. He is counter-suing for loss and damages.”

— Fiat Chrysler reaches tentative deal with UAW: “Fiat Chrysler Automobiles NV and the United Auto Workers union on Saturday announced a tentative agreement for a four-year labor contract, a boost for the automaker as it works to merge with France’s Groupe PSA,” Reuters’s Nick Carey reports.

“Italian-American Fiat Chrysler and PSA, the maker of Peugeot and Citroen, last month announced a planned $50 billion merger to create the world’s fourth-largest automaker. The tentative agreement with Fiat Chrysler, which is subject to ratification by the union members, follows contracts that the UAW already concluded with Ford Motor Co and General Motors Co.”

EU antitrust regulators probe Google’s data collection: “EU antitrust regulators are investigating Google’s collection of data, the European Commission told Reuters on Saturday, suggesting the world’s most popular internet search engine remains in its sights despite record fines in recent years,” Reuters’s Foo Yun Chee reports.

“A document seen by Reuters shows the EU’s focus is on data related to local search services, online advertising, online ad targeting services, login services, web browsers and others.”

News you can use: “Black Friday sales have dragged on for days. Now it’s Cyber Monday’s turn, which means Americans are logging onto their computers and, increasingly, their smartphones to spend billions more,” our colleague Abha Bhattarai writes in her guide to what you need to know before you buy.

MONEY ON THE HILL

Drug price bill stalls. Politico's Marianne Levine and Sarah Karlin-Smith: "Trump has vowed to lower the cost of prescription drugs. A Senate committee has approved a bipartisan bill to do just that. And the plan is going nowhere fast. Sen. Chuck Grassley, the bill’s sponsor and chairman of the powerful Finance Committee, expressed pessimism in an interview that the measure would soon hit the floor, saying Trump would have to lean on Senate Majority Leader Mitch McConnell and more Republicans would need to get behind it. 'It would be dependent upon the White House asking him to do it at this point,' said the Iowa Republican."

DAYBOOK

Tuesday:

  • AutoZone, Lands’ End and Salesforce.com are among the notable companies reporting their earnings, per Kiplinger.

Wednesday:

  • Slack Technologies, Restoration Hardware, Five Below, H&R Block and Campbell Soup are among the notable companies reporting their earnings.

Thursday:

  • The Senate Banking Committee holds a hearing on the oversight of financial regulators, Fed Bank supervisor Randal K. Quarles and  FDIC chairman Jelena McWilliams are among those expected to testify.
  • Dollar General, Tiffany & Co. Kroger, Express, Michaels, Ulta Beauty and American Outdoor Brands are among the notable companies reporting their earnings. 
  • The Financial Services Committee holds a hearing on the Trump administration’s “deregulatory approach to financial stability.”
  • A Financial Services Subcommittee holds a hearing on the FHA and its impact on home ownership.
  • The Brookings Institute holds an event titled “The repo market disruption: What happened, why, and should something be done about it?”

Friday:

  • The Labor Department publishes the latest jobs report
  • The Financial Services Committee’s task force on artificial intelligence holds a hearing on “the impact of AI on Capital Markets and Jobs in the Financial Services Industry.”
  • Big Lots is among the notable companies reporting their earnings. 
  • Brookings holds an event titled “The great reversal: How America gave up on free markets."

THE FUNNIES

BULL SESSION