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Things are falling apart – We generally try to stay optimistic at Morning Money. But it is increasingly difficult to cope with the global environmental catastrophe which is only getting worse. First, devastating floods in western Germany and parts of Belgium. This morning brings news of biblical flooding in China unlike anything seen in 1,000 years.
Via Reuters: Vast swathes of central China’s Henan Province were underwater on Wednesday, with at least a dozen dead in its capital Zhengzhou after the city was inundated by what weather observers called the heaviest rain for 1,000 years.
“With more rains expected in Henan for the next three days, the government of Zhengzhou, a city of more than 12 million people on the banks of the Yellow River, said 12 people are believed to have died in a flooded subway line. , while more than 500 have been taken to safety. “
This follows the floods in New York which also flooded the subways. And the condo collapse in Florida. And absurd record temperatures slamming the Pacific Northwest. Wall Street rebounded Tuesday after the fall of its Delta variant. But the very rapid escalation of climatic disasters is jeopardizing all recent market gains.
Maybe it wasn’t Delta? – Emails from David Bahnsen of the Bahnsen Group on the market downturn: “I just don’t believe the root cause of [Monday’s] the liquidation can be attributed to Delta. While 9 more people in intensive care in Los Angeles County, that’s nine more than I would like to see, it’s not systemic, it won’t become systemic, and the market doesn’t have a only time since June 2020 responded to the COVID news cycle.
“The unwinding of reflation trade (bond shorts get ripped off and equity positioning too exposed to the commodities / materials / inflation game) is the most logical explanation for risk aversion. Monday. If fears of an economic squeeze from Delta came, it looks to me like the market would be lower than it was three weeks ago when Delta started.
GOOD WEDNESDAY MORNING – Kudos to Giannis and the Bucks on a dazzling NBA title win and silencing all the talking heads that called him with the Suns 2-0. Email me on [email protected] and follow me on Twitter @morningmoneyben. Email Aubree Eliza Weaver on [email protected] and follow her on Twitter @AubreeEWeaver.
President Biden travels to Cincinnati for an event at 5:40 p.m. to tout his infrastructure and broader spending plans and to participate in a CNN town hall at 8:00 p.m. …
The Chamber’s financial services sub-committees hold hearings at 10:00 am on “Banking the Unbanked: Exploring Private and Public Efforts to Expand Access to the Financial System” and at 2:00 pm on bond rating agencies…
BIDEN SUPPORTS A TRUSTED BUSTER – Nos Leah Nylen and Emily Birnbaum: “It took seven months, but the progressives got exactly what they were asking for: Wu & Khan & Kanter. … Biden said … he chose Jonathan Kanter to serve as the Justice Department’s deputy attorney general for antitrust laws, the latest piece of the trio Progressives have championed to re-energize antitrust law enforcement after alleged failures of the Obama years.
“In March, Biden installed Tim Wu in the White House, a move that sparked cautious optimism among anti-monopoly supporters that Biden, long seen as a centrist in Delaware, a business-friendly country, could take the issue of. corporate power more seriously than its Democratic predecessor. They were further encouraged by Lina Khan’s appointment to the Federal Trade Commission in March. ”
NEW JERSEY BLOCKS CRYPTO OPERATOR – Our Kellie Mejdrich: “New Jersey restricts operations of crypto financial service provider BlockFi, with state officials alleging the company was offering unregulated interest-bearing accounts.
The New Jersey Bureau of Securities issued a cease and desist order requiring BlockFi to stop offering the accounts, which it said amounted to unregistered securities that raised at least $ 14.7 billion in the world. … The dispute is the latest example of friction between government regulators and cryptocurrency startups as federal and state officials craft rules for digital finance.
STOCKS REBOUND ONE DAY AFTER DELTA FEARS RIDE – NYT’s Eshe Nelson and Coral Murphy Marcos: “Stocks rebounded on Tuesday, rebounding from the worst day on Wall Street in months in a dramatic swing highlighting an investor divide over the Delta variant’s threat to growth global.
“The acceleration in the spread of the coronavirus and the uncertain trajectory of monetary policy have reminded us that the economic recovery from the pandemic remains difficult and introduced a wave of volatility in the financial markets this week. The S&P 500’s 1.5% jump on Tuesday was its biggest daily gain since March. The 1.6% drop in the index on Monday was its biggest drop since mid-May.
Moderna dominated Wall Street trading before its debut on the S&P 500 – Reuters’ Noel Randewich: “Moderna shares fell 2% in a volatile session on Tuesday, with the COVID-19 vaccine maker being the highest-listed company on Wall Street ahead of its S&P 500 debut on Wednesday.
“More than $ 34 billion in company shares have been traded, 17 times more than Moderna’s $ 2 billion average over the past six months, according to data from Refinitiv. About $ 10 billion of those transactions took place in the closing seconds of the session. ”
NASDAQ GETS PRE-IPO SHARES MARKET IN BANKING BUSINESS – Alexander Osipovich of the WSJ: “Nasdaq Inc. is partnering with a group of banks including Goldman Sachs Group Inc. and Morgan Stanley to develop its private equity market.
The deal could help drive more trades to Nasdaq Private Market, the New York-based exchange operator’s trading platform for shares of companies that have not yet been offered. initial public. Startups have waited longer to go public. Employees of these companies are often looking to withdraw their shares, while investors may want to get into a fast-growing tech startup. ”
TREASURE RALLY SHUT DOWN AFTER RETURNS HAVE TAKEN A HAMMER – Benjamin Purvis and Elizabeth Stanton of Bloomberg: “T-bills are finally taking a break after a relentless rally that pushed the 10-year yield towards levels last seen in February.
“The benchmark rate plunged more than 10 basis points on Monday amid concerns over the economic impact of the delta variant, and continued to soar early on Tuesday. But then it rebounded and recorded its first daily gain in one week, closing at 1.22% The change came as stocks also rose as investors stepped in to buy after Monday’s stock sell-off on Monday.
35 METRICS TO TELL YOU WHAT YOU WORRY ABOUT INFLATION – John Authers of Bloomberg: “Inflation is a complex phenomenon that is developing in many places. These 35 key metrics provide a more nuanced picture of how markets are positioned, what official data says, and what consumers and businesses expect. The figures are up to date as of Monday July 19 and will be updated weekly.
“Official data, as well as business and consumer surveys, are alarmingly bright. The latest National Federation of Independent Businesses survey of the prices paid by small businesses is at a level it last reached in the first quarter of 1981. Yet market indicators and surveys Bloomberg experts show no concern. predictions of economists. Both are below their averages for the past decade. ”
IMF URGES COUNTRIES TO MOVE FROM ECONOMIC RESCUE TO REFORMS – David Lawder of Reuters: “The International Monetary Fund’s No.2 official on Tuesday called on countries to shift from safeguarding their economies from collapse to relaunching growth-oriented policy reforms to improve their prospects for growth. recovery and make them more sustainable.
The IMF’s first Deputy Managing Director, Geoffrey Okamoto, said in a blog post on the IMF website that the Covid-19 pandemic has delayed and reversed some pro-growth reforms and their restoration may help make up for lost production during the pandemic. ”
SETTING RULES FOR LOW-INCOME LOANS FOR LARGE REVISION – Andrew Ackerman of the WSJ: “The main US banking regulators said on Tuesday they would work together to modernize the rules governing how banks lend hundreds of billions of dollars a year in low-income communities.
“Officials have also said they will abandon a Trump-era rule overhaul that divided regulators and industry officials. At a time when many banking services have moved online, regulators have attempted to forge a consensus to update the rules of a law enacted over 40 years ago, when banking operations were primarily conducted in retail locations. physical branches. ”