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Quick Fix
Bloomberg tries to get tough on Wall Street — Mike Bloomberg is never going to be anyone’s version of Elizabeth Warren or Bernie Sanders. He made his billions on Wall Street by providing an information service that every trader (and reporter) wanted. But he’s trying to buff up his lefty credentials a bit as he continues his long (but no longer that long) shot bid for the Democratic presidential nomination
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Via our Victoria Guida: “Bloomberg is calling for stricter rules on banks and other financial firms in an apparent bid to prove he can be tough on Wall Street despite his decades-long ties to the industry.
“Bloomberg, who earned his multibillion-dollar fortune in the finance world, says he would restore restrictions placed on banks after the 2008 crisis that have been loosened under the Trump administration, including a regulation that bans banks from making speculative gambles with depositors' money.”
And the industry is not thrilled — Via a spokesman for the Investment Company Institute: “Another name for a financial transaction tax is a retirement tax. Even though it sounds small, it would cost American families billions of dollars a year”
Trump pardons Milken — Speaking of Wall Street titans via our Caitlin Oprysko: “President Donald Trump announced a host of pardons and commutations on Tuesday … including pardons for … financier Michael Milken… ” It’s a dream come true for Milken who has spent decades trying to erase his sins of the 1980's.
GOOD WEDNESDAY MORNING — Happy Humpday! Email me at bwhite@politico.com and follow me on Twitter @morningmoneyben. Email Aubree Eliza Weaver at aweaver@politico.com and follow her on Twitter @AubreeEWeaver.
Driving the Day
CORONA VIRUS UPDATE — Via Bloomberg: “Hong Kong had a second fatality from the coronavirus while China’s death toll from the outbreak went past 2,000. … All remaining passengers in the Westerdam cruise ship in Cambodia tested negative for the virus.
“Japan began releasing passengers from a quarantined cruise ship, ending a weeks-long period that saw the deadly disease spread through the luxury vessel. But the Japanese government’s efforts came in for some criticism. The number of people infected worldwide rose above 75,000. However, the Hubei province at the center of the outbreak reported the lowest level of additional cases since it changed its method for counting infections last week”
MORE ON MILKEN — WSJ’s Byron Tau and Catherine Lucey: “Milken … spent nearly two years in prison for securities-law violations … Trump has now issued a total of 35 pardons or sentence commutations since 2017, far more than his two immediate predecessors in the first three years of their administrations. …
“The unexpected pardons drew Democratic and some Republican criticism. Sen. Bernie Sanders …. tweeted: ‘Today, Trump granted clemency to tax cheats, Wall Street crooks, billionaires, and corrupt government officials. Meanwhile thousands of poor and working-class kids sit in jail for nonviolent drug convictions.’ … Milken’s prosecution in the late 1980s defined an era of financial excess. Among those pursuing Mr. Milken on criminal charges during those years was Mr. Trump’s current personal lawyer and key figure in the impeachment saga, Rudy Giuliani”
ASIA RISES — Via Reuters: “Asian shares and U.S. stock futures rose on Wednesday, as investors tried to shake off worries about the coronavirus epidemic after a slight decline in the number of new cases. …
“The Treasury curve remained inverted … as yields on three-month bills traded above yields on 10-year notes in a sign that some investors remain cautious about the outlook. China, the world’s second-largest economy, is still struggling to get its manufacturing sector back online after imposing severe travel restrictions”
Markets
STOCKS FALL ON APPLE REVENUE WARNING — AP's Alex Veiga: "U.S. stock indexes closed with mostly modest losses Tuesday as the market gave up some of its solid gains from the past two weeks. Banks and technology stocks accounted for most of the decline.
"The Nasdaq eked out a tiny gain that was good enough to nudge it to another record high. The selling, which lost some of its momentum in the final hour of trading, came as investors weighed the impact of the virus outbreak in China on Apple and other major companies."
But for the other Fangs, it's like the warning never happened — Bloomberg's Elena Popina: "If the U.S. stock market is like a giant stone wall whose structural integrity depends entirely on the sturdiness of five tech megacaps, it didn’t act like it Tuesday. While one charter member of the Fang bloc struggled, the rest did what they normally do lately: go up.
"Facebook Inc. and Netflix Inc. each rose at least 1.6 percent, while Amazon.com Inc. and Alphabet Inc. also ended the day with gains. In fact, an index comprising Amazon, Alphabet, Facebook and Netflix just posted its best session in three days. It’s as if Apple Inc.’s sales warning never happened."
CHINA PLAYS LEFT BEHIND AS U.S. STOCKS CHARGE TO NEW HIGHS — WSJ's Steven Russolillo: "U.S. stocks have hit repeated highs this year, but many China-related trades still lag behind the broader market. Hopes that the coronavirus outbreak will be contained — and faith that central banks in China and the U.S. will step in, if needed, to support the economy — have helped rejuvenate the stock market. The S&P 500 set its 12th record close of the year Friday, extending its gain to 4.6 percent. But shares of Chinese companies listed in the U.S. and many American companies with heavy sales exposure to China haven’t gotten the same bump."
Fly Around
FED'S KAPLAN SEES RATES 'ROUGHLY' RIGHT — Reuters' Ann Saphir: "Dallas Federal Reserve Bank President Robert Kaplan on Tuesday repeated his view that the current setting of U.S. interest rates is 'roughly appropriate' through the end of this year, even as he noted risks from the flu-like epidemic that has brought parts of China to a halt. Predicting consumer-led U.S. GDP growth of 2 percent to 2.25 percent in 2020, a drop in U.S. unemployment to 3.5 percent from 3.6 percent, and a rise in inflation toward the Fed’s goal of 2 percent, Kaplan sounded fairly upbeat in an essay released Tuesday morning laying out his assessments."
BLOOMBERG'S POLICIES CATCH WALL STREET BY SURPRISE — Bloomberg's Felice Maranz: "Bloomberg’s new leftward-leaning financial regulation proposals are surprising analysts, who expected a more Wall Street-friendly campaign from the former New York mayor. The plans include a 0.1 percent transactions tax, merging Fannie Mae and Freddie Mac, and regulating Wall Street in ways that ensure the financial system is 'strong enough to weather crises without harming the broader economy or requiring taxpayer bailouts.'"
And if elected, he vowed to see his business interests — AP's Kathleen Ronayne: "Mike Bloomberg would sell the financial data and media company he created in the 1980s — which bears his name and made him a multibillionaire — if he is elected U.S. president, a top adviser said Tuesday. Bloomberg would put Bloomberg LP into a blind trust, and the trustee would then sell the company, adviser Tim O’Brien said. Proceeds from the sale would go to Bloomberg Philanthropies, the charitable giving arm that funds causes from climate change to public health and grants for American cities."
FOREIGN INFLOWS INTO TREASURIES HIT SEVEN-YEAR HIGH IN 2019 — Reuters' Gertrude Chavez-Dreyfuss: "Foreign buying of Treasuries in 2019 hit their largest level in seven years, data from the U.S. Treasury Department showed on Tuesday, as Japanese and euro zone investors sought higher-yielding U.S. government debt in a world of negative interest rates. Overall foreign inflows into U.S. Treasuries hit $6.696 trillion in December, up about $425 billion from a year earlier. That was the largest foreign inflow since 2012, data showed and analysts said."
CORONAVIRUS EXPOSES BUSINESSES' DEPENDENCY ON CHINA — WSJ's Yoko Kubota: "Just as the U.S.-China trade war was starting to fade, the coronavirus crisis is exposing how heavily dependent foreign companies are on China for their production and business.
"As the new virus continues to spread in China, killing more than 1,800, cities have been locked down, logistics and the movement of people hampered, and consumer demand dented, leaving companies — both Chinese and foreign — grappling to resume business operations. In a sign of how devastating the economic impact could be, China’s State Council on Tuesday called on regions with lower risk from the virus to resume full production."
HSBC TO CUT 35K JOBS — Reuters' Sameet Chatterjee and Lawrence White: "HSBC Holdings PLC said on Tuesday it would shed $100 billion in assets, shrink its investment bank and revamp its U.S. and European businesses in a drastic overhaul that will mean 35,000 jobs cut over three years. The bank, which has struggled to keep pace with leaner and more focused rivals, is seeking to become more competitive as it grapples with slowing growth in its major markets, the coronavirus epidemic, Britain’s European Union exit and lower central bank interest rates.”
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February 19, 2020 at 08:00PM
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Bloomberg tries to get tough on Wall Street - Politico
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