The Washington PostDemocracy Dies in Darkness

The Finance 202: Surging coronavirus infections prompt new lockdowns, challenging the recovery

with Brent D. Griffiths

Breaking this morning 🚨: Moderna’s coronavirus vaccine was found to be nearly 95 percent effective in a preliminary analysis, Carolyn Y. Johnson reports. (More below.)

The twin health and economic crises confronting the incoming Biden administration are taking a hard turn for the worse, as colder weather brings a spike in coronavirus infections and a new round of restrictions from state and local leaders.

Senate Republicans, however, aren't stepping up to negotiate another round of emergency relief spending. That lack of action will only add to the economic pain of new closures, as businesses and individuals steer into the third pandemic surge without the benefit of renewed aid from Washington. 

The pandemic is rampaging across the map at unprecedented rate. 

The United States has seen a record 1 million cases over the past six days and has topped 11 million cases total.

“On Thursday, the United States for the first time reported more than 150,000 cases in a single day,” David J. Lynch writes. “Within the next week, the daily total will top 200,000 and is likely to reach 300,000 by early December, according to Ian Shepherdson, chief economist for Pantheon Macroeconomics.”

The virus is now “everywhere,” the Wall Street Journal’s Betsy McKay and Erin Ailworth write. “People are becoming infected not just at big gatherings, but when they let their guard down, such as by not wearing a mask, while going about their daily routines or in smaller social settings that they thought of as safe — often among their own families or trusted friends.”

From Goldman Sachs, via The Daily Shot: 

State and local officials are responding by shutting back down.
  • “Michigan Gov. Gretchen Whitmer (D) on Sunday announced sweeping new limits on gatherings for three-weeks — including a ban on indoor dining at restaurants and bars, and a halt to in-person classes at high schools and colleges,” Paulina Firozi and Hannah Knowles write.
  • “Washington Gov. Jay Inslee (D) also laid out a slew of new rules, which prohibit indoor social gatherings with people outside one’s household and indoor service at restaurants, bars and more.”
  • “The governors of California, Oregon and Washington state issued a joint statement discouraging travel and advising visitors to quarantine upon arrival for 14 days,” per Lynch.
  • “On Friday, Virginia Gov. Ralph Northam (D) tightened limits on restaurants and indoor gatherings, effective at 12:01 a.m. Monday,” he writes.
  • North Dakota Gov. Doug Burgum (R) announced Friday that bars, restaurants and event venues would have to cut capacity, Hannah Knowles reports. “Most after-school activities would be put on hold. Starting Saturday, masks must be worn inside businesses, indoors in public spaces and outdoors in public when social distancing can’t be maintained, backed by potential fines of up to $1,000 for the first offense.”
  • New Mexico “reinstated many restrictions, prohibiting on-site dining and requiring nonessential businesses to close their physical locations,” Knowles writes. 
  • “Utah Gov. Gary R. Herbert, another Republican leader long wary of a sweeping mask order, said Sunday that he was mandating face coverings statewide in public settings and for people within six feet of anyone outside their household.”
  • And Vermont’s governor “prohibited all public and private social gatherings outside of members of the same household,” per the WSJ.

Major cities are clamping down, too.

  • New York Mayor Bill de Blasio warned that public schools could close Monday.
  • Chicago Mayor Lori Lightfoot issued a stay-at-home advisory Thursday.

The rising case count and new restrictions should increase pressure on Congress to pass to economic relief.

But the outlook for more help from Washington remains murky at best.

President-elect Joe Biden and Vice President-elect Kamala Harris this afternoon are set to give their first lengthy remarks on their economic recovery plans since winning the election. Biden has advocated major new spending and conferred with Democratic congressional leaders on the matter. “But he hasn’t yet spoken with Senate Majority Leader Mitch McConnell, whose cooperation would be necessary for any bill to pass during Congress’ lame-duck session,” Bloomberg’s Jennifer Epstein reports.

Biden has decisions to make about how he approaches his own party leaders, too. Specifically, he needs to decide “whether to push Democratic leaders to cut a quick deal on a package much smaller than they say is needed or to hold out hope for a larger one after he takes office,” the New York Times’s Ben Casselman and Jim Tankersley write.

“The shifting dynamics of both the pandemic and the recovery are complicating the debate. Even as it has slowed, the economy has proved more resilient than many experts expected early in the coronavirus outbreak, leading Republicans, in particular, to resist a big new dose of federal aid,” Casselman and Tanksersley write. “But the recent surge in hospitalizations and deaths from the virus has increased the risk that the economy could slow further.”

Now, even left-leaning economists are split on the appropriate, with a rising number of liberals “urging Democrats to compromise and accept a smaller package to get money flowing quickly.”

Independent macroeconomists remain divided on the outlook.

Morgan Stanley economists, for example, wrote in a Sunday note they see momentum sustaining the recovery “through a difficult winter, lifting GDP growth” to 6 percent in 2021. In their best-case scenario, the bank’s team expects “the rising threat of COVID-19 to dampen growth through the first months of 2021, followed by further fiscal support from the prospective new administration in reaction to the rise in hospitalization.” They think that relief, “and the broad dissemination of a vaccine by mid-year,” will help the economy heal faster than most forecasters now expect.

Pantheon’s Shepherdson takes a grimmer view. Shutdown measures now taking hold will “exact a real cost on the economy,” with restaurants, for one, experiencing a “rout” and airline travel “likely to plummet once Thanksgiving is over.”

“The appropriate policy response to all this is for Congress to provide substantial support to businesses, so they can retain staff and make rent and mortgage payments; to support state and local governments in the face of collapsing revenue and increased spending on healthcare and other Covid-related items; and to support people who have lost their jobs,” Shepherdson writes in a Sunday note. “Unfortunately, none of this is happening… Nothing is imminent, except a continued surge in Covid cases, hospitalizations and deaths.”

Market movers

More bombshell vaccine news.

Moderna's trial could end in just days, clearing the way for emergency approval: "'It’s extremely good news. If you look at the data, the numbers speak for themselves,' said Anthony S. Fauci, director of the National Institute of Allergy and Infectious Diseases, who was one of three people briefed on the data by an independent committee Sunday morning, per my colleague.

“'I describe myself as a realist, but I’m fundamentally a cautious optimist. I felt we’d likely get something less than this. … I said certainly a 90-plus-percent effective vaccine is possible, but I wasn’t counting on it.' Moderna’s vaccine, co-developed with Fauci’s institute, is being tested in 30,000 people.”

  • What's next: “Moderna has committed to completing its trial before applying for emergency-use authorization — which means waiting until there are 151 cases of covid-19 in the study. A previous projection showed that the trial might end sometime early next year, but it is instead expected to reach its endpoint in seven to 10 days, Stéphane Bancel, chief executive of Moderna, said because of surging coronavirus cases in the United States.”
  • It is important to note that it is still early: “The data have not yet been published or peer reviewed, and the overall effectiveness of the vaccine may change as the study continues. But Fauci said the data on severe cases was ‘quite impressive’ and effectively answers a question that has lingered: whether a vaccine measured by its success in preventing any case of covid-19 can prevent the most urgent cases, too.”

Coronavirus fallout

A number of governors, including Wisconsin Gov. Tony Evers (D), warned the public to take safety precautions as coronavirus cases surged across the nation. (Video: Reuters)
From the corporate front:
  • Food companies overhauled production, which could alleviate potential panic buying: “At the same time, major food companies — including Campbell Soup, Kraft Heinz and McCormick & Co  — told Reuters or have said publicly that they have taken measures like changing their production, packaging or pricing so retailers can keep shelves stocked,” Reuters's Richa Naidu, Victoria Waldersee and Siddharth Cavale report.
  • American consumers' embrace of digital commerce looks set to outlast the pandemic, the Wall Street Journal's Harriet Torry reports. “A recent survey by consulting firm McKinsey & Co. found that about three out of four people have tried a new shopping method due to the coronavirus and that more than half of all consumers intend to continue using curbside pickup and grocery-delivery services after the pandemic is over. Nearly 70% of consumers surveyed intend to continue buying online for store pickup.”
  • Walmart resumed counting the number of customers in its stores: “In April, the company began restricting the number of people to 20% of its store capacity, or lower if mandated by local officials. But for a brief period of time, its stores stopped counting the number of customers that entered its stores,” CNN Business's Jazmin Goodwin reports.
Around the world:
  • Governments show more patience in tackling pandemic debts: “One lesson that many governments in rich countries have learned from the last financial crisis is that they risk doing more harm than good by trying to roll back that surge in borrowing before their economies have healed, however long that takes,” the WSJ's Paul Hannon reports.
  • Asia leads the world in economic recovery: “China remains on track to grow nearly 2 percent this year, the most of any major economy … Other Asian economies are close behind China: Vietnam is expected to grow 1.6 percent, Taiwan is expected to be flat from a year earlier and South Korea is forecast to contract modestly at 1.9 percent,” the WSJ's Eun-Young Jeong reports.

The regulators

Securities and Exchange Commission Chairman Jay Clayton is stepping down. 

Clayton will leave his post at the end of the year, ahead of his term's scheduled expiration in June, the New York Times reports: “Despite criticism he wasn’t tough enough, enforcement increased on his watch. The S.E.C. pursued 3,152 enforcement cases during Mr. Clayton’s tenure, slightly more than brought by Mary Jo White from 2013 to 2017. The Clayton era also saw $16.8 billion in financial remedies, again slightly more than under Ms. White…

Like other financial regulators, the commission is likely to get tougher under President-elect Joe Biden: Names being floated to replace Mr. Clayton reportedly include Gary Gensler, an Obama-era financial regulator, and Preet Bharara, who led the Southern District under Mr. Obama.”

The transition

  • Biden fills economic posts with experts on systemic racism: “The incoming president tapped Mehrsa Baradaran, whose book ‘The Color of Money’ is a key reference on the racial wealth gap, to prepare the Treasury Department for the transition. She’s joined by Lisa Cook, an economist at Michigan State University, on the ‘landing team’ for the Federal Reserve and banking and securities regulators,” Bloomberg News's Lananh Nguyen and Jennifer Epstein report.

Trade fly-around

China helps signs one of the world's largest trade deals.

Beijing gains power in a massive Asian trade pact: “After eight years of talks, China and 14 other nations from Japan to New Zealand to Myanmar on Sunday formally signed one of the world’s largest regional free trade agreements, a pact shaped by Beijing partly as a counterweight to American influence in the region,” the New York Times's Keith Bradsher and Ana Swanson report.

“The agreement, the Regional Comprehensive Economic Partnership, or R.C.E.P., is limited in scope. Still, it carries considerable symbolic heft. The pact covers more of humanity — 2.2 billion people — than any previous regional free trade agreement and could help further cement China’s image as the dominant economic power in its neighborhood.”

  • What this means for the U.S.: “To some trade experts, this new agreement shows that the rest of the world will not wait around for the United States. The European Union has also pursued trade negotiations at an aggressive pace. As other countries sign new deals, American exporters may gradually lose ground.”

Pocket change

PNC to buy the U.S. unit of Spain's BBVA. 

PNC is paying $11.6 billion in cash for the company. Per the Associated Press: "BBVA’s U.S. operations, which are based in Houston, Texas, have $104 billion in assets and operate 637 branches, mainly in the south and southwest of the country… 

“PNC, based in Pittsburgh, Pennsylvania, is largely a regional bank and the deal would give it a presence across the U.S. Mergers and acquisitions of big banks have declined greatly since the financial crisis in 2008. Regional banks face stiffer competition now from big national banks and have been hurt more than larger banks by low interest rates.”

  • Capital Alpha's Ian Katz on the outlook for regulatory approval: “It’s worth noting that the leadership at the Fed and FDIC, which would have to approve a deal, isn’t expected to change anytime soon, so a proposed merger would be analyzed mainly by Trump appointees. However, a Biden administration Department of Justice could weigh in.”

Blackstone CEO Stephen Schwarzman defends Trump's response to the election. “About 30 chief executives — of companies as large as Goldman Sachs, Johnson & Johnson and Walmart — agreed to the emergency Zoom meeting on the morning of November 6, only hours after Mr Trump said the night before that he had won several states that had voted for Mr Biden,” the Financial Times's Andrew Edgecliffe-Johnson and Mark Vandevelde report

“Jeffrey Sonnenfeld, the Yale management professor who organised the 7am call, declined to comment on Mr Schwarzman’s remarks, but three participants said the Blackstone founder took issue with suggestions made during the meeting that the US could be on the verge of a coup.”

Rebekah Mercer is ponying up major money for Parler.

The conservative megadonor is helping the right-leaning social media site: “Mecer is the daughter of Robert Mercer, a hedge fund manager and the co-founder of the now-defunct political data-analysis firm Cambridge Analytica. The Mercers have been prominent supporters of Trump and conservative causes,” CNN Business's Alexis Benveniste reports. Rebekah Mercer revealed the investment herself.

"'John [Matze] and I started Parler to provide a neutral platform for free speech, as our founders intended, and also to create a social media environment that would protect data privacy,' Mercer said in a statement on the platform.



  • Fed Vice Chair Richard Clarida speaks during a Brookings Institution virtual event.
  • The Peterson Institute for International Economics holds a virtual event about the U.S and the WTO
  • Tyson Foods and Casper Sleep are among the notable companies reporting their earnings, per Kiplinger 




  • The Labor Department reports the latest weekly jobless claims
  • A House Financial Services subcommittee holds a hearing on the insurance industry and the pandemic
  • Macy's, Williams-Sonoma and Intuit are among the notable companies reporting their earnings


The funnies

Bull session

Former president Barack Obama’s interview on "60 Minutes," which aired on Nov. 15, touched on a wide range of topics. Here are some highlights. (Video: The Washington Post)
SpaceX successfully launched four astronauts to the International Space Station on Nov. 15, the second time a private company has sent astronauts into space. (Video: NASA via AP, Photo: Jonathan Newton/NASA via AP)