Whether a crest arrives soon could largely be determined by the Thanksgiving holiday, as the Centers for Disease Control and Prevention and health experts warn against traveling and many of the once commonplace rituals of family gatherings.
- Early data doesn’t look great: More than 1 million people went through Transportation Security Administration checkpoints in the nation’s airports on Friday — that’s the second-highest single-day rush since March 16. Meanwhile, nearly 80 percent of epidemiologists surveyed recently by the New York Times said they were having Thanksgiving celebrations with people only in their households or not at all.
- One bright spot: A third vaccine, made by AstraZeneca, is 90 percent effective if administered in two doses (a half-dose followed by a full-dose booster) and is easier to store than vaccines by Pfizer and Moderna, my colleagues reported this morning.
- “The Oxford-AstraZeneca vaccine is likely to be cheaper than those made by Pfizer and Moderna, and it does not need to be stored at subzero temperatures but can be kept in ordinary refrigerators in pharmacies and doctor’s offices,” they wrote.
President-elect Joe Biden’s team is preparing for the worst. Many of his advisers think “more urgent action” is necessary before the year ends and are planning for the possibility of a “double-dip recession” early next year, the Times’s Jim Tankersley and Emily Cochrane report.
- What’s on the table: Along with a number of things requiring a Democratic Senate majority, “Biden’s aides have weighed having the president-elect announce in the coming weeks that he will sign executive orders on his first day in office extending moratoriums on evictions and foreclosures, and deferrals of some student loan payments that are set to expire at the end of the year.”
- If Bidenworld’s worst fears come true, it would mean a new president would just be getting his footing as the economy contracts again. So far during the pandemic, there’s been a recession followed by a period of brief growth (where we’re at now) and then another recession.
The historic speed of vaccine development means an end to the pandemic may finally be in sight.
But as Anthony S. Fauci said Sunday, ignoring public health guidelines for the holidays will “get us into even more trouble.” Beyond the human toll of the virus, another spike would arrive just before the looming year-end fiscal cliff when millions of Americans are set to lose unemployment benefits and eviction moratoriums expire. Congress left town for the Thanksgiving holiday without a plan to renew them and will have precious time left when it returns, especially considering the need to fund the government to avoid a shutdown by Dec. 11.
Cloudy with a chance of meatballs: Some experts are already pessimistic about the near future. On Friday, JPMorgan became the first major bank to project a contraction of gross domestic product in the first quarter of 2021 because of rising cases and the restrictions put in place to stop the virus’s spread.
“This winter will be grim,” the bank’s economists wrote, per CNBC’s Patti Domm. JPMorgan projects 2.8 percent GDP growth to end 2020 followed by a 1 percent contraction to begin the new year. The good news is the bank’s economists are still projecting growth for subsequent quarters in 2021.
Other economists are not ready to reverse the previously widely held optimism for the year ahead. But they’re watching closely.
- “At the risk of repeating ourselves; economic growth has slowed sharply, and at this point we can’t rule out a renewed decline in GDP in the fourth or first quarters, or both,” Ian Shepherdson, chief economist for Pantheon Macroeconomic Advisers wrote.
- “The virus situation and fiscal negotiations present the two largest near-term downside risks,” Goldman Sach’s research team wrote over the weekend, cautioning of an “outright contraction.”
Light?: Stimulus negotiations remain stalled on Capitol Hill, though Biden is now pushing for a quick if imperfect resolution. Neither House Speaker Nancy Pelosi (D-Calif.) nor Senate Majority Leader Mitch McConnell (R-Ky.) have budged recently; Pelosi supports the $3.4 trillion Heroes Act the House passed in May. McConnell, faced with a conference with possible 2024 presidential hopefuls and possibly renewed emphasis on slicing deficits, has stuck firm to a much smaller proposal.
- The current White House seemingly remains indifferent. Top advisers to President Trump continue to focus on far-fetched legal efforts to remain in power, as some in the GOP continue to nudge the president out of the White House. Last week,vchief of staff Mark Meadows said the pace of the stimulus talks would “be dictated by the House and Senate.”
PROGRAMMING NOTE: Tory is on vacation during this short holiday week. I’m filling in today and we have some great guest authors slated to follow. Thanks for spending part of your morning with us.
We know Biden’s first Cabinet picks.
But the Treasury secretary is not yet among them: “Biden has selected Antony Blinken, one of his closest and longest-serving foreign policy advisers, as secretary of state as he prepares to unveil a slate of new nominees this week that will emphasize a deep well of experience in the foreign policy and national security establishment,” Annie Linskey, Matt Viser and John Hudson report.
- More names: “Biden also is planning to announce Linda Thomas-Greenfield as his nominee for ambassador to the United Nations,” my colleagues write. The president-elect will also re-elevate the position back to the Cabinet level. Biden is also expected to announce Jake Sullivan, another top Biden adviser, as his national security adviser.
- A tech policy adviser has people expecting more regulations: “Bruce Reed, Biden’s top technology adviser, helped craft California’s landmark online privacy law and recently condemned a controversial federal statute that protects internet companies from liability, indicators of how the Biden administration may come down on two key tech policy issues,” Reuters’s Joseph Menn reports.
More from the U.S.:
- Nevada announces three week ‘pause’: “Gov. Sisolak (D) on Sunday announced stricter capacity limits for many businesses, a decreased limit on gatherings and a more extensive mask mandate. Sisolak said people must wear face coverings even in private settings when they are around people outside their household,” Paulina Firozi, Lena H. Sun and Hannah Knowles report.
- CDC recommends pre-flight testing for those planning to fly internationally: “In addition to getting tested after they have completed their travels, the CDC said, people should stay home for seven days — even if they test negative,” Lori Aratani reports.
From the corporate front:
- Companies are starting to resume dividend payments: “Of the 42 companies in the S&P 500 index that suspended their dividend earlier this year, six have resumed paying their dividend and several more have given a timeline to do the same, according to S&P Dow Jones Indices,” the WSJ’s Thomas Gryta reports.
- Guitar Center files for bankruptcy: “The country’s largest musical instrument retailer said it had struck an agreement with its creditors in support of a plan that would reduce its roughly $1.3 billion in debt by $800 million,’ the Times’s Lauren Hirsch reports.
Wall Street’s love of fossil fuels on hot seat.
Central banks are putting companies on notice: “Oil majors BP and Shell provide a cautionary example of what can happen to asset values as a result of climate-related shifts in the economy. Both companies have written billions of dollars off their books this year because the pandemic has changed the trajectory for oil prices — and both are dramatically accelerating their move into cleaner energy as a result,” CNN Business’s Hanna Ziady reports.
“With that in mind, it’s only a matter of time before America’s leading investment banks, which are much bigger fossil fuel funders than their European counterparts, are forced to get a handle on their climate exposures.”
- The most at risk: “JPMorgan, Wells Fargo, Citi and Bank of America top a list of global banks funding fossil fuel firms. Since 2016, the four banks have poured over $800 billion into companies in the coal, oil and gas sectors, according to a report by the Rainforest Action Network, an environmental group.”
Boeing is furiously trying to clear out its 737 Max inventory: “Analysts say clearing the logjam of up to 450 stored jets in total is crucial before Boeing can resume meaningful production of its traditional cash cow — a task complicated by the fact that buyers have in some cases walked away during the grounding,” Reuters’s Eric M. Johnson reports.
“Across the globe, Boeing teams are hammering out delivery schedules — and financial terms — with airlines who last year had to scale back schedules and fly aging jetliners because they lacked the aircraft to meet strong demand as the MAX grounding dragged on longer than airline and Boeing executives expected.”
- European regulator to lift Max grounding in January: “The head of the European Union Aviation Safety Agency (EASA) said in remarks aired on Saturday that the 737 MAX was safe to fly … EASA’s decision is seen as the most important milestone after the FAA’s approval since, as the watchdog responsible for Airbus, it too carries significant weight in the industry,” Reuters’s Tim Hepher reports.
Note: Congress is on recess for holiday
- Urban Outfitters and Warner Music Group are expected to be among the notable companies reporting their earnings, per Kiplinger
- Best Buy, Dollar Tree, Abercrombie & Fitch, Dick’s Sporting Goods and Gap are among the notable companies reporting their earnings
- The Fed’s FOMC releases minutes of its November meeting
- The Labor Department releases the latest weekly jobless claims
- Deere & Co. is among the notable companies expected to report its earnings
- The market is closed for the holiday. Happy Thanksgiving!