Pence/Harris Debate Was Actually a Debate... with an Uninvited Guest

Posted on 10/08/2020 6:58 AM

Trump pulls out of second debate slated to be held virtually

 


In Today’s Updates


 

Market Focus:
* Traders today focusing on jobless claims, Covid/stimulus talks
* Fed's Williams says central bank already buying bonds at 'extremely high level'
* EU to tap bond market this month on a large scale to fund Covid aid programs
* Value of German goods exports rose by 2.4% month-on-month in August
* World Bank: Pandemic has thrown 88 mil. to 114 mil. people into extreme poverty

* Argentina first country to approve drought-resistant GMO wheat variety
* EIA revises up 2020 U.S. oil production forecast
* Outlook for natural gas
* British pound climbs against dollar eight of past 10 trading days
* Chevron surpasses Exxon as largest U.S. oil company, but both lag NextEra

 

Policy Focus:
* Covid aid/stimulus discussions are ongoing
* USDA reports $1.96 billion paid out under CFAP 2
* USDA’s Perdue floats possible WTO action if EU farm-to-fork plan moves ahead

 

U.S. food & beverage industry update:
* DOJ unveils additional indictments in broiler chicken price-fixing investigation
* California fines Del Monte for violating port rules on reducing emissions


Coronavirus update:
* Sen. Grassley talks about his Covid-19 safety steps
* Regeneron asks FDA to provide emergency use authorization

 

Politics & Elections:
* Pence/Harris debate was actually a debate... with an uninvited guest
* Second Trump/Biden debate will be held virtually, but Trump pulls out
* Facebook plans to widen a ban on political ads
* More than 4 million Americans have already voted, suggesting record turnout
* Economist looks at how Arizona went blue
* The New England Journal of Medicine takes a political stand for first time


Other Items of Note:
* New York prosecutor can access Trump’s Tax Returns, court rules
* Trump administration asks Supreme Court to stop census count
* Davos will be moved to Lucerne

 


MARKET FOCUS


 

Equities today: U.S. stock futures signal a slightly higher opening ahead of the weekly jobless claims report. Economists expect data on applications for jobless benefits, due to be released at 8:30 a.m. ET, will have ticked down to 825,000 last week, from 837,000 a week earlier. In Europe, German stocks advanced after better-than-expected data on exports for the month of August, a key for the trade-dependent economy. In Asia, most major benchmark stock indexes gained by the close of trading. Hong Kong’s Hang Seng Index was the one exception, slipping 0.2%. That followed reports that the Trump administration is discussing potential curbs to digital payments platforms developed by Chinese tech companies Tencent Holdings and Ant Group on the grounds of national security. Markets in mainland China remain closed for a holiday.

 

     U.S. equities yesterday: The Dow rose 530.70 points, 1.91%, at 28,303.46. The Nasdaq gained 210.00 points, 1.88%, at 11,364.60. The S&P 500 was up 58.50 points, 1.74%, at 3,419.45.

 

On tap today:

 

     • European Central Bank releases minutes from its Sept. 9-10 meeting at 7:30 a.m. ET.
     • U.S. jobless claims for the week ended Oct. 3, due at 8:30 a.m., are expected to fall to 825,000 from 837,000 a week earlier.
     • USDA Weekly Export Sales report, 8:30 a.m. ET.
     • Bank of Canada Gov. Tiff Macklem speaks to the Global Risk Institute at 8:30 a.m. ET.
     • Federal Reserve: Kansas City Fed President Esther George speaks on the economy and monetary policy at 9:15 a.m. ET, Boston Fed President Eric Rosengren speaks on recovery from the pandemic at 12:10 p.m. ET, Dallas Fed President Robert Kaplan speaks to the San Antonio Chamber of Commerce at 1 p.m. ET, and Atlanta Fed President Raphael Bostic speaks at a virtual event at 2 p.m. ET.
     • China's Caixin services index for September is out at 9:45 p.m. ET.

 

Federal Reserve Bank of New York's John Williams said the central bank is already buying bonds at an "extremely high level." Williams said Wednesday that if the Fed needs to deliver more stimulus to the U.S. economy, one of the things many look to, its bond buying, is already in aggressive use.

 

The European Union's executive arm is advancing its plans to issue common debt and is poised to tap the bond market this month for the first time on a large scale to fund its coronavirus-relief programs.

 

The value of German goods exports rose by 2.4% month-on-month in August, the fourth consecutive month of growth after the covid-19 lockdowns decimated international trade. German exports were still down 10.2% compared with last August. Meanwhile, German imports surged 5.8% month-on-month in August, reducing the country’s trade surplus.

 

The coronavirus pandemic has thrown between 88 million and 114 million people into extreme poverty, according to the World Bank’s biennial estimates of global poverty. The reversal is by far the largest increase in extreme poverty going back to 1990 when the data begin, and marks an end to a streak of more than two decades of declines in the number of the extremely impoverished, which the World Bank defines as living on less than $1.90 a day, or about $700 a year. The World Bank now estimates a total of between 703 million and 729 million people are in extreme poverty, and that the number could rise further in 2021.

 

     Poverty World Bank

 

Market perspectives:

 

     • Outside markets: The U.S. dollar index is near steady. Nymex crude oil prices are higher and trading around $40.50 a barrel. The 10-year U.S. Treasury note yield is trading around 0.77%.


     • Argentina approves drought-resistant GMO wheat variety. The Argentine government has approved HB4 drought-resistant GMO wheat, the first country to approve a GMO wheat variety. The wheat was developed by Bioceres SA. No countries have approved GMO wheat and Bioceres said they would only put the product into market once Brazil — the main destination for Argentine wheat — approves it. A statement from the Argentine government touted the drought tolerance in the HB4 wheat, with a statement saying it is aimed at “minimizing production losses and giving greater predictability to yields.” Bioceres said in a statement the wheat marks a “technological transformation at an international level.” Reuters reported that the CIARA CEC grains export industry chamber in Argentina has requested information from the government on the wheat as “not countries allow importation of GMO wheat,” the group’s head Gustavo Idigoras said.

 

     • EIA revises up 2020 U.S. oil production forecast. The Energy Information Administration (EIA) expects U.S. crude oil production to fall less than previously predicted this year, by 800,000 barrels per day to 11.45 million bpd instead of 870,000 bpd, while 2021 output is seen dropping by 360,000 bpd to 11.09 million bpd. Natural gas production is also expected to decline to 90.64 billion cubic feet per day in 2020 and 86.81 bcfd in 2021, but liquefied natural gas exports will continue to set new records this year and next. The week ending Oct. 2 was a rare one in recent months that saw gasoline consumption, diesel, and jet fuel demand all rise at the same time. But oil demand remains about 14% below the same week last year. EIA also reported a 0.5 million barrel increase in commercial crude inventories after weeks of declines.

 

     • Outlook for natural gas. Households that primarily heat with natural gas will pay 6% more during what’s expected to be a cold winter this year because of higher energy consumption as people stay put during the pandemic, the EIA projected Tuesday in its Short-term Energy Outlook. Natural gas prices fell this summer during the pandemic to the lowest level in 25 years, but rising demand this winter and reduced production will cause prices to rise beginning in 2021. That means coal will become more competitive as an electricity source, leading to a 19% rise in production next year after a 26% decline this year.

 

     • British pound has climbed against the dollar during eight of the past 10 trading days, and was up again this morning, with some analysts citing optimism over Brexit trade talks. However, the U.K. currency is down around 13% since the pre-Brexit vote level on June 23, 2016.

 

     • Chevron surpasses Exxon as largest U.S. oil company, but both lag NextEra. Chevron closed yesterday with a higher market value than Exxon Mobil, marking the first time Exxon has been dethroned as America’s largest oil company since it began as Standard Oil more than a century ago. Chevron has a market cap of $142 billion compared to Exxon’s $141.6 billion. NextEra Energy, the world's biggest provider of wind and solar energy, beat both companies by closing the day at a $145.5 billion market value.

 


POLICY FOCUS


 

Covid aid/stimulus discussions are ongoing, though Republicans and Democrats remain at odds over crucial details. House Speaker Nancy Pelosi (D-Calif.) and Treasury Secretary Steven Mnuchin spoke briefly on Wednesday about a stand-alone stimulus bill for the airline industry. They talked about standalone legislation of as much as $25 billion for cash-strapped carriers.

 

     Pelosi and Mnuchin plan to talk again today amid what is considered broad bipartisan support for a standalone relief package. Underpinning the urgency of the talks, major airlines announced plans last week to begin furloughing thousands of workers without new federal aid being received.

 

USDA reports $1.96 billion paid out under CFAP 2. USDA’s Farm Service Agency has released information on payouts made under the Coronavirus Food Assistance Program 2 (CFAP 2), reporting that $1.96 billion had been paid out as of Oct. 6. The total includes $1.1 billion in acreage-based payments, $543.7 million for livestock, $203.9 million for dairy, $103.8 million in payments for sales commodities and $2.8 million for eggs and broilers. By commodity, the payouts in this initial data included $687.3 million for corn, $414 million for cattle, $254.9 million for soybeans, $203.9 million for milk and $120.4 million for hogs/pigs.

 

USDA’s Perdue floats possible WTO action if EU farm-to-fork plan moves ahead. USDA Secretary Sonny Perdue has continued to hammer away at the European Union (EU) farm-to-fork (F2F) plan which is aimed at promoting sustainability in agriculture production. Perdue has been consistent in warning the F2F effort could affect global trade flows and negatively impact the ability of agriculture to feed a growing global population.

 

     Perdue’s focus has been that the F2F effort is based on “subjective matters rather than definitive health and safety matters,” and reiterated those views in a press call Wednesday hosted by the U.S. State Department. Perdue said the EU has countered the plan is driven by popular sentiments and demands. But he also issued a warning that while the U.S. did not want to take such an action, he would not rule out heading to the WTO on the effort. “I don't think we like to threaten about those kinds of things. If protectionism does come into play… then WTO courts are one avenue,” Perdue said, adding he wanted to resolve the issues through “diplomacy and the persuasion of both agricultural producers as well as European consumers.”

 

Food and beverage industry update:

  • DOJ unveils additional indictments in broiler chicken price-fixing investigation. The Department of Justice (DOJ) Wednesday issued a superseding indictment Wednesday charging six additional individuals for their role under a previously indicted conspiracy over alleged price fixing and big rigging on broiler chicken products. DOJ also announced additional allegations against those previously charged in the case. The DOJ said it is now charging 10 executives and employees at major broiler chicken producers, adding Timothy Mulrenin, William Kantola, Jimmie Little, William Lovette, Gary Roberts, and Rickie Blake. Mulrenin was a sales executive at a chicken supplier headquartered in Maryland and a sales executive at a chicken supplier headquartered in Arkansas. Kantola was a sales executive at a chicken supplier headquartered in Illinois. Little was a sales director at a chicken supplier headquartered in Colorado. Lovette was President and Chief Executive Officer at a chicken supplier headquartered in Colorado. Roberts was an employee at a chicken supplier headquartered in North Carolina and a manager and director at a chicken supplier headquartered in Arkansas. Blake was a director and manager at a chicken supplier headquartered in Arkansas. Tyson Foods said earlier this year it was cooperating with the DOJ investigation under a corporate leniency program that could shield the company from criminal prosecution and spokesman Gary Mickelson said the latest DOJ indictment does not affect that situation.
     
  • California fines Del Monte for violating port rules on reducing emissions. Del Monte has been fined $1.99 billion by the California Air Resources Board (CARB) for violating rules requiring ships to reduce emissions while in port, including rules on how long they run engines and reduce the use of on-board power. CARB said Del Monte ships did not meet requirements at the Port of Hueneme in Ventura County from 2015 to 2019. CARB officials said the fine was meant to “send a signal” to shippers that they need to follow the port rules. Half the money will go to a state fund to reduce air pollution and half to a program that provides incentives for ships to reduce speeds in the Santa Barbara Channel region and San Francisco Bay during peak ozone and whale migratory seasons.

Coronavirus update:

  • Summary: Global cases of Covid-19 are now at 31,194,507 with deaths at 1,056,408, according to data compiled by the Center for Systems Science and Engineering (CSSE) at Johns Hopkins University (JHU). The U.S. case count is at 7,550,731 with 211,834 deaths.

    Link to Covid Case Tracker

    Link to Our World in Data

     
  • Sen. Chuck Grassley (R-Iowa), third in line for presidential succession as Senate president pro tempore, said he will continue his usual Covid-19 precautions of wearing face masks, using plenty of disinfectant and social distancing in meetings to stay healthy. Grassley, 87, said he's "pretty cautious."
     
  • President Trump and White House Chief of Staff Mark Meadows said that a pair of experimental Covid-19 treatments from Eli Lilly and Regeneron, including one Trump was given on Friday, would be considered for an emergency use authorization by the FDA. Regeneron Pharmaceuticals has asked the FDA to provide emergency use authorization to its REGN-COV2 investigational antibody combination for Covid-19, The company says it currently has enough doses for about 50,000 patients and expects to have enough for 300,000 patients within the next few months. President Trump received the antibody cocktail last Friday and lauded the treatment in a video posted to Twitter yesterday, saying he would authorize its emergency use.

    Regeneron

POLITICS & ELECTIONS


 

  • Links
    2020 Presidential Election Interactive Map
    The Green Papers
    Real Clear Politics
    2020 Political Atlas
    2020 Demographic Swingometer
    — Presidential debates: Scheduled to occur Sept. 29, Oct. 15 and Oct. 22.
    — VP debate: Scheduled for Oct. 7.
    Days until election

     
  • The Pence/Harris debate was actually a debate, with current Vice President Mike Pence and wannabe VP Kamala Harris offering a contrast on issues and values that the media or presidential candidates are not detailing. Both candidates dodged some questions to focus on talking points. And, there was an uninvited guest... more on that, later.

         Pence said Democratic presidential candidate Joe Biden's policy suggestions on vaccines and testing and other details were mostly “plagiarized from President Trump” an allusion to Biden having copied remarks during his 1988 presidential campaign from a British politician. Pence better than Trump explained how far left the Biden-Harris Democrats have moved, from Biden’s $2 trillion in spending over four years on a version of the Green New Deal; the $4 trillion of tax increases through higher business and corporate rates; their goal of eliminating fossil fuels that would cost jobs and raise energy prices; and the Biden record on foreign policy that includes opposing the raid on Osama bin Laden. Pence also exposed Senator Harris for refusing to answer, as Biden also did last week, whether they support packing the Supreme Court if Judge Amy Coney Barrett is confirmed.

         Harris scored points on health policy when she noted the Trump administration’s support for the case before the Supreme Court that would repeal ObamaCare, claiming this would strip millions of their health insurance, which is false but Pence did not have an effective retort. She sought to make the election a referendum on the Trump administration’s handling of the coronavirus pandemic. Harris held the Trump administration responsible for failing to stem the spread of the virus, criticizing Pence, who leads the White House’s task force on the coronavirus, for the climbing death toll. “The American people have witnessed what is the greatest failure of any presidential administration in the history of our country,” Harris said, adding that Trump has “forfeited his right to re-election” as a result of his handling of the pandemic. “They knew what was happening, and they didn’t tell you,” Harris said, looking directly into the camera, addressing viewers at home. “They knew and they covered it up.” Pence responded that Trump “has put the health of the American people first.” Harris said she would only take a Covid-19 vaccine approved under the Trump administration if the government’s public health experts vouched for it. “If Donald Trump tells us that we should take it, I’m not taking it,” she said. The vice president urged Harris not to raise doubts about the safety of a vaccine. “Stop playing politics with people’s lives,” he said.

         On recent protests and looting in major cities, Pence criticized the violence that accompanied some of the protests, using it to push the “law and order” message that has been at the center of Trump’s re-election campaign.

         Pence said America was not “systemically racist” and there was no implicit bias in law enforcement. Harris responded by criticizing Trump’s comments about white supremacists at the first presidential debate. Harris rejected Pence’s characterization of the protests, pointing out that they were largely peaceful and that she participated in some. She also invoked her record as a prosecutor, saying she was the only candidate with direct experience on issues of criminal justice. “I will not sit here and be lectured by the vice president about what it means to enforce the laws of our country,” Harris said. "I'm a former career prosecutor. I know what I’m talking about. Bad cops are bad for good cops,” Harris added. Pence said: "It really is remarkable that, as a former prosecutor, you would assume that an empaneled grand jury, looking at all the evidence, got it wrong... There was no excuse for what happened to George Floyd," Pence added. "And justice will be served. But there’s also no excuse for the rioting and looting that followed."

         On taxes and the economy, Pence took aim at Biden’s pledge to reverse the 2017 tax bill signed into law by the president. “The American economy, the American comeback is on the ballot,” Pence said. Harris said Biden would only raise taxes on those making more than $400,000 a year. She also said Trump “rode the coattails” of the economic recovery that began under the Obama administration and then squandered it by failing to rein in the pandemic. “There couldn’t be a more fundamental difference between Donald Trump and Joe Biden,” Harris said.

         On a key energy topic, Pence brought up Harris’s comment from the Democratic primary that she would ban fracking as evidence that a potential Biden administration would cost jobs in the energy sector. Although Harris has expressed support for a ban on fracking in the past, she is now backing Biden’s plan to address climate change that includes a banning on fracking only on federal lands. “First of all, I will repeat, and the American people know, that Joe Biden will not ban fracking. That is a fact,” she said.

         Harris brought up farmers during an exchange over climate change policy, saying a Biden/Harris administration would make the climate issue a top priority. “Joe has seen and talked with the farmers in Iowa, whose entire crops have been destroyed because of floods,” Harris said. Pence said Biden’s plan to rejoin the Paris climate accord and move away from fossil fuels would severely damage the U.S. economy. He stressed the U.S. has made “great progress” in reducing carbon emissions via “innovation” and the use of natural gas.

         Harris labeled the president’s trade policy as a failure. “You lost that trade war—you lost it,” she said. Pence shot back: “Lost the trade war with China? Joe Biden never fought it.” Meanwhile, Harris opposed Trump’s renegotiated trade agreement with Canada and Mexico (USMCA) because she didn’t view it as aggressive enough on climate change.

         On foreign policy, Harris referenced a recent news report alleging that the president had called Americans who died in war “losers” and “suckers.” Pence raised his voice, saying “the slanders against President Donald Trump regarding the men and women of our armed forces are absurd.”

         On China, after being asked if China was a friend, competitor, or enemy to the U.S., Pence vowed to hold Beijing accountable for the spread of the coronavirus. “China is to blame for the coronavirus, and President Trump is not happy about it,” Pence said. “He’s made that very clear.” Pence also accused Biden of being a “cheerleader” for China.

         Bottom line: The vice-presidential candidates were calmer and more focused on policy differences than were Trump and Biden in their first debate.

         One last thing: the fly, which sat atop Pence’s head for just over two minutes during the V.P. debate. Pence never reacted to the fly’s appearance on the right side of his head. It stood out against his bright white hair, standing still for the most part but moving around slightly before flying away. A local TV news reporter from California clocked the fly’s screen time on Pence’s head at 2 minutes, 3 seconds. The latest parlor game is Who will play the fly on Saturday Night Live? Was the fly breaking debate protocols by not wearing a mask? Biden tweeted a photo of himself holding a fly swatter. Sen. Rand Paul (R-Ky.), joked that “the deep state planted a bug” on Pence.

         Fly on Pence

         Biden on fly

     
  • Second Trump/Biden debate will be held virtually, but Trump pulls out. The Commission on Presidential Debates announced that the next debate will be held virtually as questions continue to swirl about President Trump's health and how long he will remain infectious with Covid-19. The debate, scheduled for Oct. 15, will be held with Trump and former Vice President Joe Biden in separate locations "in order to protect the health and safety of all involved with the second presidential debate," the commission said. However, this morning Trump said he won't participate in the second debate after the organizing group said it would be held remotely.
     
  • Facebook plans to widen a ban on political ads. The tech giant will suspend all political and issue-based advertising — not just new ads, as it announced before — after polls close on Nov. 3, and notify all users that no candidate has won until news outlets declare a winner. Critics say the plan still doesn’t go far enough.
     
  • More than 4 million Americans have already voted, suggesting record turnout. With less than four weeks to go before Election Day, more than 4 million Americans already have voted, more than 50 times the 75,000 at this time in 2016, according to the United States Elections Project, which compiles early voting data. The shift has been driven by an expansion of early and mail-in voting in many states as a safe way to cast a ballot during the coronavirus pandemic and an eagerness to weigh in on the political future of Trump, said Michael McDonald of the University of Florida, who administers the project. “We’ve never seen this many people voting so far ahead of an election,” McDonald said. “People cast their ballots when they make up their minds, and we know that many people made up their minds long ago and already have a judgment about Trump.” The early surge has led McDonald to predict a record turnout of about 150 million, representing 65% of eligible voters, the highest rate since 1908. The numbers reported so far come from 31 states, McDonald said, and will grow rapidly as more states begin early in-person voting and report absentee mail-in totals in the next few weeks. All but about a half-dozen states allow some level of early in-person voting. In the crucial battleground state of Florida, Democrats have requested more than 2.4 million mail-in ballots and returned 282,000, while Republicans have asked for nearly 1.7 million and returned more than 145,000.
     
  • The Economist looks at how Arizona went blue. Fresh from their vice-presidential debate, both Mike Pence and Kamala Harris — as well as Joe Biden — will be in the Copper State today. The vice-president will appear in Peoria, a suburb outside of Phoenix, Arizona’s state capital, while the Democrats will launch a bus tour towards Flagstaff. Such locations have been chosen to target two important groups of voters, the Economist notes. The first is suburbanites. A recent New York Times poll found Biden nine points ahead of President Trump in Maricopa County, which surrounds Phoenix. For Trump, that is a 12-percentage-point decline from his winning margin in 2016. The second group is Hispanics, who account for roughly a quarter of eligible voters in the state — up from a fifth in 2010. “Since they favor the Democrats, such a shift has helped to turn the state light-blue. Next month Arizona could elect its second Democratic senator and vote for a Democratic president for only the second time since 1952,” the Economist observes.
     
  • For the first time in its 208-year history, The New England Journal of Medicine — the world’s most prestigious medical journal — has taken a political stand, the N.Y. Times reports (link). Editors said the Trump administration “took a crisis and turned it into a tragedy.” The NYT article said, “The journal did not explicitly endorse Joseph R. Biden Jr., the Democratic nominee, but that was the only possible inference, other scientists noted.”

 


OTHER ITEMS OF NOTE


 

  • Trump's taxes: A federal appeals court dealt a blow to President Trump, ruling that New York prosecutors could enforce a subpoena seeking years of financial documents, including his tax returns. The three-judge panel, in a unanimous decision, rejected Mr. Trump’s arguments that the grand jury subpoena issued by Manhattan District Attorney Cyrus Vance Jr. was overbroad and issued in bad faith. The president is expected to appeal the ruling to the U.S. Supreme Court.
     
  • Trump administration asks Supreme Court to stop census count. The Justice Department asked the Supreme Court on Wednesday to overturn an order requiring the Census Bureau to continue its 2020 count for several more weeks.
     
  • Davos will be moved to Lucerne. Davos, the Swiss ski resort, has become synonymous with the World Economic Forum. But the next annual gathering of the business and political elite will be moved to lower-altitude Lucerne; it will also be in May, delayed from January, and is expected to be far smaller than in years past. The theme is “The Great Reset.”

 

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