with Brent D. Griffiths

With 56 days until the election, not even Joe Biden's supporters know what his victory would mean for Wall Street.  

Even after building a 36-year track record of service in Washington, participating in 11 presidential primary debates this cycle, and releasing relatively detailed proposals, Biden has left plenty of room for interpretation about his ideological orientation now. 

The Democratic nominee and his aides are now compounding the confusion: While Biden publicly calls out Wall Street excesses and promises to rein them in, Biden staffers privately are reassuring industry leaders that he won’t focus on the issue in office, Annie Linskey reports.

As one investment banker described Biden campaign calls to financiers, “They basically said, ‘Listen, this is just an exercise to keep the [Elizabeth] Warren people happy, and don’t read too much into it.’” 

Specifically, the campaign appears to be throwing cold water on some progressive policy proposals that have riled the big banks, including setting up bank accounts through the Federal Reserve and enabling people to access banking services through the Post Office.

The mixed signals on financial regulation highlight an intraparty split that could crack open post-election.

Democrats are already divided on basics of the party’s economic vision. During the Democratic National Convention last month, a family fight over how much more the government can afford to spend on a rescue package for the coronavirus-ravaged economy spilled into public view, as we wrote here at the time. And Biden did little to clarify where he would land, as he continues to weigh how ambitious his agenda will be.

The dynamic extends to other planks of his economic platform. The strategy “has helped him unify the party’s liberal and moderate wings behind the shared goal of defeating President Trump,” Linskey writes. “But it also is laying the groundwork for bitter internal battles, should Biden win the presidency, on topics from race to climate to trade, while Wall Street leaders plan to have their way with a president many expect to be unusually susceptible to outside pressure.”

The Biden campaign’s joint policy-drafting effort with the Bernie Sanders team has also muddled the picture.

A task force bringing together Biden aides with counterparts from Sanders’s orbit produced a set of surprisingly progressive economic policy plans. The Sanders camp believed the Biden campaign was adopting it as official policy. But a Biden campaign spokesman tells Linskey they were merely recommendations.

Either way, there’s a limit to how far white papers can go toward predicting a Biden administration’s approach to these matters in an uncertain political environment.

Potentially as important, some analysts note: the appointees Biden chooses for top financial regulatory posts. For example, if Democrats retake the Senate but only with a thin margin, there will be limits to what a Biden White House could accomplish legislatively, leaving most of the action to the agencies.

“I continue to point my clients to the cohort of red-state centrist Democrats, as I believe they will moderate the legislative discussion in a Blue Wave scenario even before the White House becomes a factor,” Compass Point analyst Isaac Boltansky said in an email. But “financial regulators have considerable day-to-day policymaking authority and we expect Sen. Warren to have a say in those posts no matter where her seat may be in a potential Biden administration.”

Carter Dougherty, spokesman for Americans for Financial Reform, a liberal group that advocates stricter financial regulation, says the Biden campaign has released some “promising” proposals. “We want to see more,” he said, while also emphasizing the importance of Biden’s appointed regulators, “given the discretion they have.” 

Market movers

Futures signal another rough day after massive sell-off.

Stocks look primed to continue last week's losses: Nasdaq futures were set to fall sharply early Tuesday after technology shares suffered their worst sell-off in more than five months," CNBC's Yun Li and Eustance Huang report. “The Nasdaq-100 futures implied an open drop of about 3%. Futures on the Dow Jones Industrial Average the S&P 500 were slightly in early morning trade…

On Friday, stocks snapped a five-week winning streak after a big reversal in major technology stocks last week. Steep losses in Amazon, Apple, Microsoft and Facebook — 2020′s market leaders — drove the tech-heavy Nasdaq Composite down 3.3 percent to suffer its worst week since March 20. The Dow and the S&P 500 fell 1.8 percent and 2.3 percent last week, respectively, posting their biggest weekly losses since June.” (Amazon CEO Jeff Bezos also owns The Washington Post)

Sudden volatility in tech stocks unnerves investors: “The Nasdaq Composite slid more than 6 percent over two days last week after hitting a fresh high, led by Thursday’s record one-day decline in market value at Apple Inc., the most-valuable U.S. listed company. Selling intensified Friday, at one point pushing the index down almost 10 percent from its record and spreading to markets including crude oil and gold, before a broad reversal narrowed losses in some stocks and sent others back into more familiar, green territory,” the Wall Street Journals Amrith Ramkumar reports.

“Few investors believe the late-week rout signals the end of a rally that has taken the Nasdaq to 43 record closes and pushed the S&P 500 up more than 6 percent for the year. The economy continues to show signs of improvement and with interest rates near record lows, the investor mantra that ‘there is no alternative’ to purchasing the shares of major U.S. corporations remains very much intact.”

  • Doubts are raising over one theory for the big tech surge: “A report that SoftBank Group Corp. is making billions by using options to bet on technology stocks has stirred speculation the Japanese conglomerate could have been a driving force behind the rally — but not everyone is convinced,” Bloomberg Newss Yakob Peterseil and Joanna Ossinger report.
Fed’s strategy shift will ripple across the world of central banks.

Greater tolerance for inflation will be a drag on the dollar for years: “Such a reinterpretation of the Fed’s mandate could be seen as a foray into social policy, a vital precedent for others as they reexamine their own roles after years of unconventional moves that already impact wealth and income distribution,” Balazs Koranyi and Leika Kihara of Reuters report.

“The second, more immediate concern will be the dollars weakness, which hurts exporters from Europe to Asia. This is bound to feature prominently at the European Central Banks policy meeting on Thursday, as a strong euro will make it more difficult for exporting nations in the euro zone to climb out of their deepest recession in living memory. Countries like Germany and France, or Japan, traditionally generate growth from net exports, which take a hit when their currencies firm.” 

Money on the Hill

Mnuchin says he will work with Nancy Pelosi to avoid a government shutdown. 

The Treasury secretary's comments come as talks toward a relief package remain stalled: “Mnuchin said his expectation is that this so-called ‘continuing resolution’ would extend government funding into December — although the date has not yet been agreed on,” Erica Werner reports.

“Without action by Congress, agency funding would expire at midnight Sept. 30, and the government would begin to shut down. … Mnuchin’s comments appear to suggest that the White House is not girding for a clash over this spending deadline, though White House officials have in the past tried to negotiate deals with Democrats in Congress, only to have [Trump] announce that he is opposed at the last moment.”

  • ICYMI: Heres where relief plan talks stand: “A fight over Education Secretary Betsy DeVos’s plan to subsidize private school tuition is threatening to derail a Senate GOP effort to write a slimmed-down coronavirus relief bill,” Erica Werner and Laura Meckler reported last week of efforts by Sen. Ted Cruz (R-Tex.) to include a $5 billion tax credit in the GOPs bill.
  • Morgan Stanley analysts now see hope for a breakthrough on stimulus talks. Here is their latest projection for economic growth, via Heather Long: 
House Democrats will probe Postmaster General Louis DeJoy.

Lawmakers are seizing on a Post report about a possible straw donor scheme: “House Democrats are launching an investigation of Postmaster General Louis DeJoy and called for his immediate suspension following accusations that he reimbursed employees for campaign contributions they made to his preferred GOP politicians, an arrangement that would be unlawful,” Amy Gardner reports.

“Rep. Carolyn B. Maloney (D-N.Y.) said in a statement late last night that the House Committee on Oversight and Reform, which she chairs, would begin an investigation, saying that DeJoy may have lied to her committee under oath … Maloney’s announcement came a day after The Post reported allegations that DeJoy and his aides urged employees at his former North Carolina-based logistics company to write checks and attend fundraisers on behalf of Republican candidates.”

Coronavirus fallout

CEOs issue safety pledge amid Trump's quest for pre-election approval.

The title of their statement makes their intent abundantly clear: “The chief executives of nine drug companies pledged not to seek regulatory approval before the safety and efficacy of their experimental coronavirus vaccines has been established in Phase 3 clinical trials, an extraordinary effort to bolster public faith in a vaccine amid [Trump’s] public rush to introduce a vaccine before Election Day,” Christopher Rowland reports this morning.

“In most contexts, pledges by drug companies that they will adhere to safety and efficacy standards would be unremarkable. But their joint resolve in the current political environment — and the headline pasted on their statement: “BIOPHARMA LEADERS UNITE TO STAND WITH SCIENCE” — make clear their intent to ease growing worries about the race for a vaccine amid intense White House pressure.”

  • The companies involved: “AstraZeneca, Johnson & Johnson, Merck, Moderna, and Novavax, as well as those heading two joint vaccine projects, Pfizer and BioNTech, and Sanofi and GlaxoSmithKline.”
  • Cases almost quadrupled during summer season: From Memorial Day weekend through the unofficial end of the season Monday, the number of Americans who died of covid-19 shot up from just under 100,000 to more than 186,000, according to data tracked by The Washington Post, as infections nearly quadrupled to upward of 6.2 million,” Teo Armus reports.
  • The latest tallies, via The Atlantic's covid-19 tracking project:
  • New York's infection rate has been below 1 percent for 30 days: “As of Sunday, New York reported 720 new infections, four deaths and 410 hospitalizations — another low since mid-March — related to the virus,” Lateshia Beachum reports.
  • Experts worry about sanitization theater: “Six months into the pandemic, Americans seem determined to Clorox their way to absolution. They’re wiping down soccer balls, Lysoling beach chairs, touching PIN pads with ‘touch tools’ and gloves, and cleaning bags of Tostitos with diluted bleach,” Maura Judkis reports.

When superpowers collide

China lashes out after administration threatens to sanction chipmaker.

SMIC becomes the latest company to get caught up in the trade war: “The U.S. Department of Defense said Saturday that it was considering adding SMIC to the Commerce Department’s so-called Entity List, which would make it more difficult for the company to obtain parts made in the U.S., potentially hurting production,” CNBCs Ryan Browne reports.

“On Monday, Chinese Foreign Ministry spokesman Zhao Lijian accused Washington of ‘blatant hegemony,’ adding that Beijing was ‘firmly opposed’ to such actions.”

Trump vows to cut back U.S.-China ties. “Trump said he intends to curb the U.S. economic relationship with China, contrasting himself with Joe Biden by threatening to punish any American companies that create jobs overseas and to forbid those that do business in China from winning federal contracts,” Bloomberg's Emma Kinery and Josh Wingrove report

“'We’ll manufacture our critical manufacturing supplies in the United States, we’ll create “made in America” tax credits and bring our jobs back to the United States and we’ll impose tariffs on companies that desert America to create jobs in China and other countries,' Trump said at a White House news conference on Monday where he complained at length about his Democratic re-election opponent."

FBI sweep of China researchers leads to cat-and-mouse tactics: “FBI agents have questioned dozens of researchers this summer about their work and military affiliations. In recent weeks, the widening operation has triggered efforts by some suspects to evade authorities and led to the arrest of at least two researchers whose work is allegedly tied to China’s military development, according to court filings by prosecutors,” WSJs Kate O’Keeffe and Aruna Viswanatha report.    

Pocket change

Oil falls after Saudis cut prices.

The mood has turned “pessimistic,” one broker says: “Brent crude was trading at $42.03 a barrel, down 63 cents or 1.5 percent, by 1555 GMT, after earlier sliding to $41.51, its lowest since July 30. West Texas Intermediate U.S. crude fell 67 cents, or 1.7 percent, to $39.10 per barrel after hitting $38.55, its lowest since July 10,” Reuters reports.

“The world’s top oil exporter, Saudi Arabia, cut the October official selling price for Arab Light crude it sells to Asia by the most since May. … China, the world’s biggest oil importer, which has been supporting prices with record purchases, slowed its intake in August and increased its products exports, customs data showed. … The Labor Day holiday marks the traditional end of the peak summer demand season in the United States and that renewed investors’ focus on the current lackluster fuel demand in the world’s biggest oil user.”

Citigroup feuds with hedge funds: “At the root of the dispute: Citi’s role helping billionaire investor Ron Perelman restructure the corporate loans of cosmetics company Revlon Inc. Some investors wanted Citi to bow out of the transaction; when it didn’t, they blamed the bank for facilitating a deal that hurt their investments,” WSJs Matt Wirz, Becky Yerak and Alexander Gladstone report.

“Chief among those investors: $28 billion money manager Brigade Capital Management LP. Until recently, Brigade and its founder, Donald Morgan, had worked closely with Citi. … Now Citi and Brigade are slugging it out in court, cutting ties and arguing over the return of around $170 million the fund received when the bank accidentally paid Revlon lenders about $900 million.”

AB InBev plans to replace longtime CEO Carlos Brito: “The brewing company is considering external candidates to replace Brito, who has been at the helm for 16 years, a Financial Times report said,” according to Reuters.

Campaign 2020

Money, money, money?

Trumps reelection was supposed to be a financial juggernaut, but an early advantage has evaporated: “Five months later, [Trump’s] financial supremacy has evaporated. Of the $1.1 billion his campaign and the party raised from the beginning of 2019 through July, more than $800 million has already been spent. Now some people inside the campaign are forecasting what was once unthinkable: a cash crunch with less than 60 days until the election,” the New York Timess Shane Goldmacher and Maggie Haberman report.

“Interviews with more than a dozen current and former campaign aides and Trump allies, and a review of thousands of items in federal campaign filings, show that the president’s campaign and the R.N.C. developed some profligate habits as they burned through hundreds of millions of dollars.”

  • Some of the eyebrow-raisers: “A pair of Super Bowl ads the campaign reserved for $11 million, according to Advertising Analytics — more than it has spent on TV in some top battleground states — a vanity splurge that allowed [Trump] to match the billionaire Mike R. Bloomberg’s buy for the big game.”
  • “There was also a cascade of smaller choices that added up: The campaign hired a coterie of highly paid consultants (Mr. Trump’s former bodyguard and White House aide has been paid more than $500,000 by the R.N.C. since late 2017); spent $156,000 for planes to pull aerial banners in recent months; and paid nearly $110,000 to Yondr, a company that makes magnetic pouches used to store cellphones during fund-raisers so that donors could not secretly record Mr. Trump and leak his remarks.”



  • The Center for Responsible Lending hosts a Facebook event on housing financing, featuring remarks from FHFA director Mark Calabria
  • Lululemon Athletica, Casey's General Stores and Slack Technologies are among the notable companies reporting their earnings, per Kiplinger.


  • The Senate Banking Committee holds a hearing on the Fed’s emergency lending facilities  
  • The House Small Business Committee holds a hearing on transparency in small business lending
  • American Eagle Outfitters and GameStop are among the notable companies reporting their earnings


  • The Labor Department reports weekly jobless claims
  • The House Financial Services Committee holds a hearing on aid for states and territories during the pandemic 
  • A subcommittee of the House Small Business panel holds a hearing on the state of the rural economy 
  • Peloton, Oracle, Chewy and Dave & Buster's Entertainment are among the notable companies reporting their earnings


The funnies

Bull session