Democrats have been unified by their desire to oust President Trump. But if that happens, deep divisions on the issue of trade are likely to reappear. Stocks were mixed Thursday morning after the three major indices endured a deep rout a day earlier. Investors digested a record surge in third-quarter GDP after a historic slump earlier this year, and another weekly report on jobless claims that came in better-than-expected. A slew of corporate earnings results also loom. Will the Bulls be making another draft night trade? With Minnesota? The Bulls in next month’s NBA draft are prepared to trade up, trade down or stay where they are at No. 4. This comes directly from sources who may or may not know. I still get the scoops.
Democrats have been unified by their desire to oust President Trump. But if that happens, deep divisions on the issue of trade are likely to reappear.
WASHINGTON — Joseph R. Biden’s presidential campaign has unified the Democratic Party around a shared goal of ousting President Trump from office. But as the campaign nears an end, a deep split between progressives and moderate Democrats on trade policy is once again spilling out into the open.
As the Biden transition team begins gearing up to select the people who might staff the administration, the progressive wing of the party is pushing for appointees with deep ties to labor unions and congressional Democrats. And they are battling against appointees that they say would seek to restore a “status quo” on trade, including those with ties to corporate lobbyists, trade associations and Washington think tanks that advocate more typical trade deals.
The split is falling along familiar lines between moderates — who see trade agreements as key to American peace and prosperity — and left-wing Democrats, who blame trade deals for hurting American workers in favor of corporate interests.
The division has dogged the Democratic Party for years. President Bill Clinton and Barack Obama joined with moderate Republicans to try to lock in new trade pacts to the chagrin of labor unions and many Congressional Democrats. For Mr. Obama, that split spilled into a fight over the Trans-Pacific Partnership, a multicountry trade pact that became so politically toxic that Hillary Clinton disavowed it during her 2016 presidential campaign.
The rift helped speed the election of President Trump, who won over some blue-collar workers disaffected with the Democratic Party’s trade record by espousing a populist worldview and vowing to rewrite “job-killing” trade pacts like the North American Free Trade Agreement.
The balance of power between progressives and moderates in trade policy will be “a huge issue for the Democrats,” said Simon Lester, an expert in trade policy at the Cato Institute.
“During the campaign, you can kind of gloss over it, you can make statements in vague ways, but at a certain point you have to make decisions about personnel and about policy,” Mr. Lester said.
Mr. Biden has bridged these divisions so far in the campaign by focusing on criticizing Mr. Trump for his costly and erratic trade policy, which he says has alienated allies like Canada and Europe and failed to convince China to make significant economic reforms. Mr. Biden has emphasized broad principles that most Democrats agree on, like working with allies and investing at home to make American businesses more competitive, and he has declined to provide specifics on other policies that might divide his supporters.
In the Oct. 22 debate, Mr. Biden criticized Mr. Trump for embracing “thugs” in North Korea, China and Russia, and he said the president “pokes his finger in the eye of all of our friends, all of our allies.”
“We need to be having the rest of our friends with us, saying to China, ‘These are the rules. You play by them or you’re going to pay the price for not playing by them, economically.’” Mr. Biden said. “That’s the way I will run it.”
Some progressive Democrats have worried that Mr. Biden — who voted for NAFTA in 1993 and to pave the way to bring China into the World Trade Organization in 2000 — would put America back on the mainstream trade policy path that Mr. Obama and Mr. Clinton pursued. Many of Mr. Biden’s closest advisers are holdovers from the Obama administration, who, like Mr. Biden, believe deeply in the benefits of global economic integration.
But Mr. Biden has also done more than previous Democratic presidents to court the progressive wing of his party, pledging to give both labor unions and environmentalists a larger role in writing future trade rules. His vice-presidential pick, Senator Kamala Harris of California, has also taken a more skeptical stance on trade and was one of the few Senate Democrats to vote against the revised NAFTA agreement because it did not contain provisions on climate change.
“He’s going to, in my opinion, run a very labor-friendly administration,” said Jon Leiber, managing director for the United States at the Eurasia Group.
To help quiet any trade fights within the party, Mr. Biden has promised to first focus on domestic priorities like curbing the coronavirus pandemic, addressing climate change and investing in infrastructure and health care before writing new trade deals, signaling that the blistering pace of trade talks seen under President Trump is likely to slow.
“The thing that they realize politically is that if they want strong unity and purpose on things like Covid, infrastructure and climate, they cannot create a war between the congressional Democrats and the White House,” said Lori Wallach, the director Public Citizen’s trade watch, a progressive who has been cited as a potential trade official in a Biden administration.
Mr. Biden has papered over other difficult divisions within the Democratic Party by declining to state a position. Mr. Biden has released more extensive plans for expanding Buy American programs and proposed tax penalties for companies that send jobs overseas.
But on other policy choices, his campaign has been vague. That includes declining to say whether a Biden White House would keep the tariffs Mr. Trump imposed on $360 billion worth of Chinese goods, whether it would proceed with bans on Chinese social media sites like TikTok or WeChat or how it would resolve a standoff that has crippled the World Trade Organization. It’s unclear if a Biden administration would ultimately move to rejoin the Trans-Pacific Partnership, or continue existing trade talks with the United Kingdom and Kenya.
Mr. Biden’s advisers tend to be more unified on China, but there is still a split, people familiar with the conversations say. Some see China as a challenge, but still believe in trying to integrate the country into the global system and work with the Chinese on issues like climate change and nuclear proliferation. Others see a clash between the two systems as more inevitable, and say China’s increasingly authoritarian behavior is likely to preclude much cooperation.
Democrats are unified around some issues — like using new provisions in the revised North American trade agreement to push for labor reforms in Mexico, and updating trade rules to include commitments on climate change. And many Democrats support reforms at the W.T.O. that would pressure China to change its trade practices.
The path of Mr. Biden’s trade policy will depend largely on personnel decisions, including who become the Treasury Secretary, the United States Trade Representative and commerce secretary.
One of the most widely mentioned candidates for Treasury Secretary is Lael Brainard, an economist and member of the Federal Reserve’s Board who served as under secretary for international affairs at the Treasury during the Obama administration. But some congressional Democrats have pointed to Ms. Brainard’s reluctance to label countries like China as currency manipulators when she was at the Treasury, and instead are pushing for Sarah Bloom Raskin, a former Fed governor and Treasury official whom they see as more aligned with their views.
For the U.S. trade representative, progressive politicians and trade experts are pushing candidates including Katherine Tai, the chief trade counsel at the House Ways and Means Committee; Michael Wessel, a member of the U.S.-China Economic and Security Review Commission; and Tom Perriello, a former congressman from Virginia who is now executive director of Open Society-U. S., a philanthropic group, according to people familiar with the conversations.
In a sign of the challenges facing Mr. Biden, those same voices have objected to more mainstream candidates they say could return trade policy to a previous status quo, like Fred Hochberg, the former head of the U.S. Export-Import Bank or Miriam Sapiro, a trade negotiator for the Obama administration who is now at a public relations firm.
The commerce secretary, a position sometimes doled out to wealthy political donors, is also an area where progressives hope to make staffing inroads. The Commerce Department has become increasingly powerful under the Trump administration as it pursued trade cases against other nations, accusing foreign governments of unfairly subsidizing goods sold by American competitors. The department has also levied tariffs on foreign metal and is responsible for imposing sanctions against Chinese companies, including placing several big firms like Huawei on an entity list that prevents them from buying American technology and other components.
Among the names being floated for role of commerce secretary is Rohit Chopra, a commissioner at the Federal Trade Commission and an ally of Senator Elizabeth Warren who has pushed the trade commission to crack down on companies that falsely claim their products are American-made.
Some non-trade roles will also play a part in shaping policy, particularly with regard to China. Top officials in the Departments of State and Defense, as well as the National Security Council, could have outsized influence over the direction of relations with China given the growing concerns among both Democrats and Republicans about Beijing’s economic, military and technology ambitions.
Author: Ana Swanson
Stock market news live updates: Stocks steady after Wednesday’s selloff
Stocks were mixed Thursday morning after the three major indices endured a deep rout a day earlier. Investors digested a record surge in third-quarter GDP after a historic slump earlier this year, and another weekly report on jobless claims that came in better-than-expected. A slew of corporate earnings results also loom.
The S&P 500 and Dow each rose, after the latter index closed lower by 943 points, or 3.4%, on Wednesday for its worst single-session drop since June. The Nasdaq outperformed to pare some losses from Wednesday, when tech shares had fallen after U.S. senators grilled the CEOs of Facebook (FB), Twitter (TWTR) and Alphabet (GOOG, GOOGL) over the companies’ content moderation practices in a hearing. Each of these companies, along with peer Big Tech companies Amazon (AMZN) and Apple (AAPL), are set to report quarterly results after market close on Thursday.
Traders globally adopted a risk-off mood this week, with an escalation of restrictions in Europe to try and curb a rise in coronavirus cases driving volatility higher. The CBOE Volatility Index (^VIX) spiked to above 40 during Wednesday’s session for the highest level in more than four months, and it held around 39 Thursday morning.
Both France and Germany announced renewed lockdowns spanning for about the next month, though the restrictions stopped short of the draconian measures announced earlier on during the pandemic in the spring. In the U.S., the rolling seven-day average of daily new virus cases rose to a record 70,000 as of Tuesday, according to data compiled by the Washington Post. And on the vaccine front, Dr. Anthony Fauci, the nation’s top infectious-disease expert, said he believed it would take until at least January for the U.S. Food and Drug Administration to authorize a COVID-19 inoculation.
Some analysts, however, considered the most recent pull-back an inevitable moment for stock prices to come back down to earth, given the strong rally earlier on over the summer as stay-in-place orders first eased.
“Markets have been baking in a lot of optimism: that the pandemic was under control, that the economy was healing, and that things would be back to something approaching normal in 2021 (and maybe not in late 2021, but earlier),” Brad McMillan, chief investment officer for Commonwealth Financial Network, said in a note Wednesday. “Those assumptions were always optimistic, though, and what we are seeing now is a reality-based repricing. As such, this drop is both necessary and healthy. Markets should reflect the most likely future path, not the most optimistic, and that is where we are headed.”
Pending home sales unexpectedly turned lower in September following four straight monthly gains, according to the National Association of Realtors’ monthly report Thursday. The Northeast was the only major region to post a month-on-month rise in pending sales.
“The demand for home buying remains super strong, even with a slight monthly pullback in September, and we’re still likely to end the year with more homes sold overall in 2020 than in 2019,” Lawrence Yun, NAR’s chief economist, said in a statement. “With persistent low mortgage rates and some degree of a continuing jobs recovery, more contract signings are expected in the near future.”
Here were the main moves in markets, as of 9:35 a.m. ET:
S&P 500 (^GSPC): +12.35 points (+0.38%) to 3,283.38
Dow (^DJI): -18.29 points (-0.07%) to 26,501.66
Nasdaq (^IXIC): +81.28 (+0.77%) to 11,093.89
Crude (CL=F): -$5.8 (-2.17%) to $35.22 a barrel
Gold (GC=F): -$14.30 (-0.76%) to $1,864.90 per ounce
10-year Treasury (^TNX): -0.2 bps to yield 0.779%
Government data newly out Thursday showed third-quarter economic activity rose at a record pace, after a record drop in the second quarter. New jobless claims also improved more than expected last week.
Third-quarter GDP increased at a record 33.1% annualized rate, following a drop of 31.4% in the second quarter. The rise was driven by a more than 40% jump in personal consumption, as consumer spending picked back up following stay-in-place orders. Still, the level of overall output in the U.S. economy remained below pre-pandemic levels.
New weekly jobless claims came in at 751,000 for the week ended Oct. 24, or better than the 770,000 expected. During the prior week, new claims were at an upwardly revised 791,000. Continuing jobless claims were also better than expected at 7.756 million versus the 7.775 million anticipated and previous week’s upwardly revised 8.465 million.
Kellogg posted third-quarter results that surpassed estimates, with adjusted earnings per share of 91 cents on reported net sales of $3.43 billion better than the 86 cents on revenue of $3.4 billion anticipated.
The company raised its full-year guidance again Thursday morning and said it expects organic net sales growth to come in at 6% this year, or a full percentage point ahead of previous guidance. The company is also now expected to grow operating profit by 2% over last year, versus previous guidance for a decline of 1%.
“As the COVID-19 pandemic continued throughout the third quarter, demand for packaged foods for at-home consumption remained elevated, albeit moderating from the previous quarter,” Kellogg said in its statement Thursday morning. “This again drove higher sales of the company’s products in retail channels which along with strong growth in emerging markets, more than offset a decline in foods sold in away-from-home channels.”
Net sales increased in each of the Asia Pacific, Middle East and Africa (AMEA) and Europe, while declining in Latin America during the quarter. North American net sales were roughly flat for the third quarter, though organic sales grew for cereal, snacks and frozen foods.
Kraft Heinz (KHC) posted faster-than-anticipated organic revenue growth in the third quarter and profit that beat expectations, driven by an ongoing trend toward at-home dining during the pandemic.
Organic revenue grew 6.3% in the third quarter after dropping by more than 1% in the same period last year. Consensus analysts were looking for a rise of 4.7%, according to Bloomberg data.
Adjusted earnings came in at 70 cents a share on net sales of $6.44 billion, with the top-line rising 6%. Both metrics were better than expected, as analysts were looking for earnings of 62 cents a share on revenue of $6.33 billion. The biggest sales jump came in the U.S. – the company’s largest market by far – where net sales increased by 7.4%. International sales increased by 3.9%.
Kraft Heinz also raised its full-year outlook and sees mid-single-digit 2020 organic net sales growth and high-single digit 2020 adjusted EBITDA growth.
Comcast (CMCSA) posted third-quarter results that blew past estimates, driven by a pickup in high-speed internet customers. These grew by a record 633,000 during the quarter for a 67% increase over last year, with the figure coming in well above the 527,450 expected, according to Bloomberg data.
Third-quarter adjusted earnings of 65 cents per share on revenue of $25.53 billion were each better than the 51 cents a share on revenue of $24.73 billion anticipated. The top-line figure represented a drop of nearly 5% over last year.
Streaming was also strong for Comcast, with its new service Peacock seeing 22 million sign-ups in the third quarter, versus the 10 million it saw at the end of June. Comcast had said in January that it expected Peacock would reach as many as 35 million consumers and break even by 2024.
Theme parks were the weak point for Comcast this quarter. As with Disney, amusement park closures and attendance caps on opened parks has curbed revenue, and the division saw sales slump 81% during the third quarter. Films also suffered from a delay of movie releases, and Comcast’s filmed entertainment business unit saw sales drop 25%.
Here were the main moves in markets, as of 7:23 a.m. ET:
S&P 500 futures (ES=F): 3,281.00, up 17.50 points or 0.54%
Dow futures (YM=F): 26,517.00, up 108 points or 0.41%
Nasdaq futures (NQ=F): 11,234.00, up 101.25 points or 0.91%
Crude (CL=F): -$1.20 (-3.21%) to $36.19 a barrel
Gold (GC=F): -$0.70 (-0.04%) to $1,878.50 per ounce
10-year Treasury (^TNX): -0.3 bps to yield 0.778%
Here were the main moves in markets, as of 6:05 p.m. ET:
S&P 500 futures (ES=F): 3,278.25, up 14.75 points or 0.45%
Dow futures (YM=F): 26,514.00, up 105 points or 0.4%
Nasdaq futures (NQ=F): 11,195.00, up 52.25 points or 0.47%
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Author: Emily McCormick·ReporterOctober 29, 2020, 6:12 PM·8 mins read
Will the Bulls make a trade on draft night?
Will the Bulls be making another draft night trade? With Minnesota?
The Bulls in next month’s NBA draft are prepared to trade up, trade down or stay where they are at No. 4. This comes directly from sources who may or may not know.
I still get the scoops.
It’s draft time in the NBA, which is the time of more change of directions than Gale Sayers on a kickoff return. I used to joke at draft time about Jerry Krause’s responses: Hello, he lied. Jerry never thought that was as amusing as I did.
So what about the Bulls trading for the No. 1 pick in this draft?
It’s been speculated, of course, that the Bulls might be looking to move up. Which has been sandwiched between reports given the Denver history of basketball chief Arturas Karnisovas that he’d prefer to move down. Deni Avdija, the most frequent Bulls selection by mock drafters, often is said to be the Goldilocks solution: Neither too risky or not risky enough. Just right. You know, like Obi Toppin. This will get even more confusing in the next three weeks.
But about that No. 1 pick in the draft, which is now held by the Minnesota Timberwolves. A return for Zach LaVine?
It’s necessary first to consider the qualifiers, that rarely do teams trade the top pick in a draft, that Minnesota is said to desire top prospect Anthony Edwards with the top pick since he fills a need for them and that new Bulls coach Billy Donovan is a LaVine fan.
It’s true the Timberwolves have talked about trade possibilities for No. 1. But that’s usually to solicit offers. Who knows, maybe the Lakers don’t want LeBron anymore. Unsurprisingly, there were reports this week of the Charlotte Hornets’ interest in the No. 1 pick. Seems like the Timberwolves already are working overtime.
With a team being built around Karl-Anthony Towns and D’Angelo Russell, it makes sense to add an NBA-ready, physical shooting guard like Edwards.
Though what if the Timberwolves could add a near All-Star like LaVine? Who also can shoot. Timberwolves fans loved the high flying LaVine. He was an unpopular addition to the big trade for Jimmy Butler on draft night in 2017. Other than Butler, of course. Kris Dunn was a backup still trying to survive Tom Thibodeau and Lauri Markkanen was the draft pick Minnesota didn’t get to know. But they loved the amiable skywalker and dunk champion, who was recovering from knee surgery. Thibs didn’t have time to wait.
What if the Timberwolves could get someone like LaVine instead of Edwards?
LaVine is an underrated Bulls star who has outperformed many NBA All-Stars without getting the recognition because of the Bulls rebuilding project.
Would anyone in this draft be worth the price to the Bulls?
Certainly not Edwards, who isn’t as talented as LaVine. And likely not LaMelo Ball, who could even fall to No. 4 because of questions about his shooting and team fit. Which leaves seven footer James Wiseman among the supposed Big Three in this draft.
He doesn’t make much sense for Minnesota because they have Towns.
But he does seem intriguing for a team like the Bulls.
The Bulls only listed seven footers on the roster, Markkanen and Luke Kornet, spend most of their time 25 feet from the rim. Wiseman is still just a kid, but no one on the Bulls roster features that sort of potential defensive instincts with big time athletic ability.
The draft and building a roster is about special players. Could Wiseman be that player?
Wendell Carter Jr. drives to the basket against Detroit
Many expect Wendell Carter Jr. to have a breakout season with a more defined and involved role. And while he has a physical game, he lacks the explosive athletic potential and size. There aren’t many players who project like Wiseman. Centers, even mobile ones, are said to be on the verge of NBA extinction. But there’s plenty of big people who are tough to defend, especially in the recent playoffs. Like Nikola Jokic, Bam Adebayo and Anthony Davis. And All-Star centers hanging around the East like Joel Embiid and Nikola Vucevic.
The Bulls with new management and a new coaching staff seem inevitably headed for some sort of makeover. We have no idea what it will be. But it seems apparent with all the new eyes and philosophies. Remember, the two new executives came from teams built around mobile centers. The coach, even having wing/forward stars like Russell Westbrook, Kevin Durant and Paul George, always had a place in his heart and in the middle for a big man. Imagine having one that could react without having to think about it first.
Would it make sense for the Bulls, as has been speculated, to try to get the No. 1 draft pick? My personal guess is they don’t, in part because Minnesota probably is privately committed to using it and the new Bulls guys want to see what Zach/Coby White looks like in a potentially dynamic scoring backcourt.
But Minnesota with Towns’ infatuation with the three-point line could use an inside banger to protect Towns. Anyone seen Onyeka Okongwu? He projects as a powerful inside player, perhaps a more skilled version of Montrezl Harrell. He’d certainly be available at No. 4.
Zach’s too good and valuable, especially to a team like the Timberwolves anxious to be in contention, to basically be exchanged for three spots in the draft. So Minnesota’s No. 1, a future unprotected Timberwolves No. 1, Jarrett Culver and onetime Bull James Johnson to fill out the salary match?
It seemingly sets the Bulls back immediately because LaVine is the team’s leading scorer. Culver is a good defender who did shoot much better the last part of the season. Is it enough? How much do the Bulls want to change? Next week I’ll likely be considering possibilities for trading down. Three weeks of guesses to go.
I still assume the Bulls to use the pick at No. 4. Where it’s not too hot and not too cold, but perhaps just right. For whom? I’ll get back to you on that. I should know by late Nov. 18.
Author: by Sam Smith
Posted: Oct 28, 2020