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Oct 12, 2020

World Politics: Saudi Arabia is the 'white whale' of Israel's Middle East peace deals, Jerusalem official says


Natasha Turak

DUBAI, United Arab Emirates — Officials in Israel have high hopes for budding ties with the United Arab Emirates as the country’s cabinet on Monday ratified the historic deal establishing diplomatic relations between the two countries for the first time.  

Jerusalem Deputy Mayor Fleur Hassan-Nahoum is one of them. Co-founder of the UAE-Israel Business Council, she spoke to CNBC’s Capital Connection about the business opportunities made possible by the deal, known as the Abraham Accord. 

“People are just so excited for this peace ... the reception we’ve received here is unprecedented,” Hassan-Nahoum said. “The Israeli side is really curious about the UAE, the Emiratis, and vice versa.” 

Since the accord’s announcement, the countries have signed a series of deals on collaboration in areas including technology, healthcare and research.

“On the Israeli side, Dubai, the UAE can be a gateway to the East … the UAE is very interested in Israel’s innovative spirit, the start-up nation, innovative technologies from here that can help them, help their exports,” she said, naming farming and food tech among the sectors where she saw potential. 

Will Saudi Arabia follow suit?

The Palestinian government in the West Bank does not share that optimism. Left out of the deal’s construction, the Palestinian Authority called it “despicable” and “a betrayal.” Regional analysts say that while the deal temporarily halted Israeli annexations of Palestinian territories, it sent the message that Israel can make major progress in its relations with Arab countries without having to give up any land it’s secured in the occupied territories. 

This continued tension is what poses an obstacle to other Arab countries following the UAE’s lead, but that might not be for long: within weeks of the Abraham Accord’s announcement in August, Bahrain joined as well. 

Asked whether she foresaw a region-wide shift, Hassan-Nahoum said: “I really believe there is a momentum and I hope the momentum continues. It started with the UAE, followed by Bahrain, there were rumors about Oman, Sudan, and Saudi Arabia, which I think is the big white whale in this story.”

A white whale is a metaphor used to describe something that is highly coveted or pursued, but hard to achieve.

Saudi Arabia’s reaction to the UAE-Israel news was initially muted, with the kingdom’s foreign minister later stating that it would not establish its own diplomatic ties with Israel until the country signed an internationally-recognized peace agreement with the Palestinians. Still, intelligence cooperation between Israel and the kingdom has been an open secret for some time as they share a common adversary in Iran.  

Israel’s Prime Minister Benjamin Netanyahu, U.S. President Donald Trump and United Arab Emirates (UAE) Foreign Minister Abdullah bin Zayed display their copies of signed agreements as they participate in the signing ceremony of the Abraham Accords, normalizing relations between Israel and some of its Middle East neighbors, in a strategic realignment of Middle Eastern countries against Iran, on the South Lawn of the White House in Washington, U.S., September 15, 2020.

Tom Brenner | Reuters

“I really do believe that when people see what normalization looks like, when they see that there can be mutual prosperity … it will help bring peace generally across the Gulf, not just with specific countries,” Hassan-Nahoum said.

While Saudi Arabia’s King Salman is unlikely to recognize Israel, regional watchers believe that his son, Crown Prince Mohammed bin Salman, may be less reluctant — especially considering his friendship with Trump’s son-in-law and senior advisor Jared Kushner, who led the Abraham Accord, and his desire to fortify a united front against Iran.

Jared Kushner and U.S. election anticipation

The conversation came as the UAE and Israel launched talks on diplomatic, economic and business relations. The agreement, brokered by President Donald Trump’s administration, made the UAE the first Gulf country to establish ties with Israel and was the first such accord for the region in more than 20 years. 

It also comes just weeks before the U.S. presidential election. Asked if the election result could derail the momentum for diplomatic reconciliation, Hassan-Nahoum was optimistic, but admitted that Kushner’s role in spearheading the accord was vital to that momentum. 

“Joe Biden came out and he was very supportive of the deal,” the deputy mayor said. “My only concern is that — everybody knows — Jared Kushner was really the architect of this. He took this and put 100% of his attention and efforts into this. I’m concerned that if there is no Jared involved here then the momentum might slow down.” 

“But let’s see what happens,” she added. “Certainly from Israel we’ll keep our arms open and hope that this continues.”

Wall Street Closing Report: Dow rallies more than 200 points, Nasdaq posts best day in a month


Fred Imbert, Jesse Pound

U.S. stocks rose sharply on Monday as tech shares outperformed while investors monitored stimulus negotiations in Washington.

The Dow Jones Industrial Average rose 250.62 points, or 0.9%, to close at 28,837.52. The S&P 500 gained 1.6% to end the day at 3,534.22 and the Nasdaq Composite advanced 2.6% to 11,876.26. It was the Nasdaq’s best day since Sept. 9, when it rallied 2.7%.

Apple jumped 6.4% — the stock’s biggest one day gain since July 31 — as investors looked ahead to a key event for the company. On Tuesday, Apple is expected to unveil its first 5G iPhone. History shows Apple shares usually outperform the broader market after an iPhone launch.

Facebook and Amazon advanced 4.3% and 4.8%, respectively. Alphabet popped 3.6% and Microsoft gained 2.6%.

The iShares Russell 1000 Growth ETF (IWF) rallied 2.2% and outperformed its value counterpart, the iShares Russell 1000 Value ETF (IWD). The latter rose just 0.8%.

The market is “exhibiting a very strong pro-growth/momentum bias,” said Adam Crisafulli, founder of Vital Knowledge, in a note. “The pivot away from cyclicals (which had been leading for the last two weeks) could reflect reduced near-term odds for fiscal stimulus and spiking COVID cases, but the core macro narrative in the US is still intensely focused on the possibility for a ‘Blue Wave.’”

Monday’s rally came even as chances for another round of stimulus before the election appeared to dim over the weekend. Both House Speaker Nancy Pelosi, D-Calif., and Senate Republicans pushed back on a $1.8 trillion offer from the White House.

In a letter to colleagues, Pelosi highlighted what she said were insufficient offers on healthcare issues.

“The news is filled with the numbers in terms of dollars. The heart of the matter is: can we allow the virus to rage on and ignore science as the Administration proposes, or will they accept the scientific strategic plan in the Heroes Act to crush the virus,” Pelosi said, referring to a bill that Democrats already passed in the House.

Meanwhile, Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows called for a separate vote on the Paycheck Protection Program in their own letter to Congress on Sunday.

The apparent impasse follows a whirlwind week in Washington that saw President Donald Trump at one point call off negotiations, saying that Congressional Republicans should focus on confirming Amy Coney Barrett to the vacant Supreme Court seat. Trump then reversed his position and said to “go big” in negotiations.

But Mike Wilson, chief U.S. equity strategist at Morgan Stanley, told CNBC’s “Squawk on the Street” he thinks “there’s enough stimulus in the pipeline for now to kind of get us through year-end without causing a risk of a double-dip recession, and ultimately, no matter who wins the election, by the first quarter we’ll have an additional stimulus that’s probably still required to make sure that the recovery continues.”

Wall Street was coming off a strong performance last week. The Dow posted its biggest one-week gain since August, while the S&P 500 and Nasdaq Composite had their best week since July.

“Markets last week appeared to price perceived election clarity, and with it, a growing likelihood of additional fiscal stimulus – at least in the pipeline. This was reflected from small cap outperformance to rising Treasury yields,” Julian Emanuel, BTIG’s chief equity and derivatives strategist, said in a note to clients Sunday.

Investors are also bracing for the third-quarter earnings season. Several major banks and airlines are slated to report their results this week, including JPMorgan Chase and Delta Air Lines on Tuesday.

While results for the period are expected to decline significantly, traders believe the results could come in much better than expected.

Currencies | The Dollar: Dollar index holds near 3-week lows; yuan drops


3-4 minutes - Source: CNBC

US dollar and Chinese yuan arranged for a photograph on September 7, 2017.

US dollar and Chinese yuan arranged for a photograph on September 7, 2017.

studioEAST | Getty Images

The dollar index held near three-week lows on Monday as optimism over the possibility of a COVID-19 relief bill was curbed by concern over the pandemic while China’s yuan fell after the People’s Bank of China (PBOC) changed its reserve requirements policy.

On Sunday, the Trump administration called on Congress to pass a stripped-down coronavirus relief bill using leftover funds from an expired small-business loan program, as negotiations on a broader package continue to run into roadblocks.

The greenback has held within a range of about 2% over the past three weeks as talks have gone back and forth. The dollar had its biggest loss in six weeks on Friday amid rising hopes a fiscal stimulus package would be agreed to stem the economic fallout from COVID-19. More stimulus is seen as negative for the dollar.

“The chances of getting a comprehensive stimulus deal before the election are slim,” said Edward Moya, senior market analyst, at OANDA in New York. “So what that means is that the damage to the economy is going to grow and it means that right now we are talking somewhere around $1.8 or $2 trillion ...and that just means the stimulus is going to be bigger the longer they wait.”

The offshore yuan fell 0.8% against the dollar after China’s central bank said on Saturday it would lower the reserve requirement ratio for financial institutions when conducting some foreign exchange forwards trading, a move seen as a bid to curb recent yuan appreciation.

The yuan had reached a more than 17-month high on Friday in offshore trade and has gained nearly 8% against the dollar since late May. But on Monday the offshore yuan was on track for its biggest daily decline against the dollar since March.

The PBOC’s move to end the requirement for banks to set aside cash to cover yuan forward transactions would make it easier to short the yuan, said RBC’s head of Asia FX, Alvin Tan.

The move was also cited by analysts as a reason for weakness in the China-sensitive Australian dollar, which was down about 0.4%. The dollar index fell 0.1%. The euro was down 0.15% to $1.1814.

In Europe, the World Health Organization has urged governments to restrict activity to combat a rapid rise in COVID-19 infections.

The Japanese yen weakened 0.31% versus the greenback at 105.28 per dollar after Bank of Japan Governor Haruhiko Kuroda stressed his readiness to take additional monetary easing steps.

The pound held above $1.30, strengthening after Prime Minister Boris Johnson set out on Monday a three-tier system of local lockdown measures in England. Sterling was last trading at $1.3069, up 0.18% on the day.

Oil Price Report: Oil falls nearly 3% as production comes back online


2-3 minutes - Source: CNBC

Oil pumping jacks, also known as "nodding donkeys", are reflected in a puddle as they operate in an oilfield near Almetyevsk, Russia, on Sunday, Aug. 16, 2020.

Oil pumping jacks, also known as “nodding donkeys”, are reflected in a puddle as they operate in an oilfield near Almetyevsk, Russia, on Sunday, Aug. 16, 2020.

Andrey Rudakov | Bloomberg via Getty Images

Oil prices fell about 3% on Monday as force majeure at Libya’s largest oilfield was lifted, a Norwegian strike affecting production ended and U.S. producers began restoring output after Hurricane Delta.

Brent crude fell $1.21, or 2.8%, to $41.64 a barrel West Texas Intermediate fell 2.88%, or $1.17, to settle at $39.43 per barrel.

“Renewed post hurricane production in the Gulf of Mexico, an apparent restart over the weekend of Libya’s largest oil field and today’s strength in the U.S. dollar increase the possibility of a WTI downswing back to the early October lows,” said Jim Ritterbusch, president of Ritterbusch and Associates.

Hurricane Delta, which inflicted the biggest blow in 15 years to energy production in the U.S. Gulf of Mexico last week, was downgraded to a post-tropical cyclone at the weekend.

Workers headed back to production platforms on Sunday and French oil major Total restarted its 225,500 barrel per day Port Arthur refinery in Texas.

Front-month prices for both contracts gained more than 9% last week in the biggest weekly rise for Brent since June. But both fell on Friday after Norwegian oil companies struck a deal with labour union officials to end a strike that had threatened to cut the country’s oil and gas output by close to 25%.

Production in Libya, a member of the Organization of the Petroleum Exporting Countries (OPEC), is expected to rise to 355,000 barrels per day (bpd) after force majeure at the Sharara oilfield was lifted on Sunday.

Rising Libyan output will pose a challenge to OPEC+ - a group comprising OPEC and allies including Russia - and its efforts to curb supply to support prices.

Prices were also pressured by a jump in new COVID-19 cases, which has raised the spectre of more lockdowns which could dampen demand for oil.

Infections are at record levels in the U.S. Midwest. In Europe, British Prime Minister Boris Johnson announced new coronavirus lockdown measures and Italy is preparing fresh nationwide restrictions.

Gold Price Report: Gold slips from 3-wk high on prospect of limited U.S. stimulus


2-3 minutes - Source: CNBC

A one kilo Swiss gold bar and US dollars gold coins are pictured in Paris on February 20, 2020.

A one kilo Swiss gold bar and US dollars gold coins are pictured in Paris on February 20, 2020.

JOEL SAGET| AFP via Getty Images

Gold prices fell from a three-week peak on Monday as expectations of an inadequate U.S. coronavirus relief bill dented the appeal of bullion, which is used as a hedge against likely inflation.

Spot gold fell 0.3% to $1,923.56 per ounce, after hitting its highest since Sept. 21 at $1,932.96. U.S. gold futures settled up 0.1% at $1,928.90.

The Trump administration on Sunday called on Congress to pass a stripped-down coronavirus relief bill using leftover funds, as negotiations on a broader package ran into resistance.

“We are talking trillions (in stimulus) one day and it’s billions the next day and it will (probably) be millions next. It feels like it is getting smaller coming into the election,” said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.

The possibility of a smaller U.S. coronavirus stimulus bill is weighing on gold, he added.

Gold has gained over 26% so far this year helped by stimulus from governments and global central banks as it considered a hedge against inflation risks and currency weakening.

Investors were also keeping a close eye on the upcoming U.S. election due in a couple of weeks, where Democrat Joe Biden is seen as more likely to win.

“Gold will be higher if Biden wins because he will spend a lot of money,” said Bob Haberkorn, senior market strategist at RJO Futures, adding any unknowns on the election night will also provide support.

Bullion also eased as Wall Street’s main indexes were supported by rising tech stocks.

The U.S. government and bond market are closed on Monday for Columbus Day.

Among other precious metals, silver fell 0.2% to $25.07 per ounce, platinum fell 1.3% to $874.22, while palladium lost 1.6% to $2,399.86.

European Markets Closing Report: European markets close higher as investors weigh China optimism, U.S. stimulus progress


Elliot Smith, Holly Ellyatt

LONDON - European stocks ended the day higher on Monday, tracking gains in Asia on the back of strong Chinese data, while progress on a U.S. stimulus package was also in focus.

.FTSEFTSE 100FTSE6001.38-15.27-0.25600961582
.FCHICAC 40 IndexCAC4979.2932.480.6674090850

The pan-European Stoxx 600 closed provisionally 0.8% higher, with sectors including autos, household goods, tech and utilities all adding more than 1%. The travel and leisure and retail sectors both ended the day in the red, as did banks and oil and gas.

The pandemic continues to cause widespread concern in Europe with governments resorting to localized lockdowns to stem the spread of the virus. Spain’s government has caused controversy after it imposed a state of emergency on Madrid and the U.K. government announced a three-tier system of local restrictions for England on Monday.

Meanwhile, U.S. stocks rose Monday morning as investors prepared for a busy week of corporate earnings and monitored stimulus negotiations in Washington.

Chances for another round of stimulus before the election appeared to dim over the weekend, however, as both House Speaker Nancy Pelosi, D-Calif., and Senate Republicans pushed back on a $1.8 trillion offer from the White House.

Stocks in Asia-Pacific mostly advanced in Monday trade, as investors monitored the Chinese yuan’s movements after the People’s Bank of China announced a rule change that made it cheaper to short the yuan.

In terms of individual share price movement, KPN shares climbed around 6.7% after Bloomberg reported Friday that Swedish private equity firm EQT was exploring an $11 billion takeover bid for the Dutch telecoms company. Virgin Money UK ended up around 5.5%.

At the bottom of the European blue chip index, Rolls-Royce slipped 12% after a volatile few weeks of trading.

- CNBC’s Jesse Pound and Eustance Huang contributed to this report.

Market Insider | Biggest Moves Premarket: Stocks making the biggest moves premarket: Twilio, Apple, AstraZeneca, Levi Strauss


Peter Schacknow

Check out the companies making headlines before the bell:

Twilio (TWLO) – The cloud communications platform provider announced a deal to buy customer data platform provider Segment for $3.2 billion in Twilio shares.  The deal is expected to close during the fourth quarter.

Apple (AAPL) – A judge ruled that Apple can continue to bar the popular videogame “Fortnite” from its app store for now. Apple and “Fortnite” developer Epic Games are in the midst of a legal dispute, with Apple saying Epic violated the app store’s terms by bypassing its payment systems.

AstraZeneca (AZN) – The European drug maker has struck a $486 million deal with the U.S. government to develop and supply up to 100,000 doses of its Covid-19 antibody treatment. AstraZeneca’s treatment is similar to the one used to treat President Donald Trump after he became infected with Covid-19.

Levi Strauss (LEVI) – The jeans and apparel maker was upgraded to “overweight” from “equal-weight” at Morgan Stanley, which makes note of management’s quick response to a difficult retail environment as well as strong revenue growth.

Berkshire Hathaway (BRK.B) – The Jain Foundation sold 7,000 Class B Berkshire shares on Sept. 30, according to an SEC filing. The sale reduces the foundation’s Berkshire holdings to 185,095 class B shares. The foundation is run by Berkshire Vice Chairman Ajit Jain.

PepsiCo (PEP) – Citi upgraded the beverage and snack maker to “buy” from “neutral”, in anticipation of improving profit margins in North America as well as strong organic sales growth relative to its peers.

Dillard’s (DDS) – Berkshire Hathaway portfolio manager Ted Weschler disclosed a 5.89% stake in the department store chain, according to an SEC filing. The shares are not a Berkshire investment – they are held in a trust for the benefit of Weschler’s family members.

Alphabet (GOOGL) – The Justice Department and state attorneys general are mulling the idea of forcing Alphabet’s Google unit to sell its dominant Chrome browser, according to people with knowledge of the discussions who spoke to Politico. Those talks come ahead of an anticipated antitrust lawsuit against Google.

Regeneron Pharmaceuticals (REGN) – CEO Leonard Schleifer told the CBS program “Face The Nation” that President Trump represents “a case of one”, and that the company’s antibody treatment for Covid-19 still needs more testing to determine its efficacy. Schleifer’s comments came after President Trump labeled the treatment “a cure”.

General Motors (GM) – The automaker reported a 12% increase in China sales during the July through September quarter, the first quarterly sales increase reported by GM in China in 2 years.

Twitter (TWTR) – Twitter was upgraded to “buy” from “hold” at Deutsche Bank, pointing to improving growth during the second half of this year and a “compelling bull case” for 2021.

DraftKings (DKNG) – The sports betting company was rated “outperform” in new coverage at Credit Suisse, which points to the company’s marketing relationships and an acceleration in the legalization of sports betting and online gaming in the U.S., among other factors.

DealBook: New Questions About Leon Black’s Ties to Jeffrey Epstein


12-16 minutes - Source: NYT

Credit...Lucy Nicholson/Reuters

New questions about Leon Black’s ties to Jeffrey Epstein

Shortly after Jeffrey Epstein was arrested last year on sex-trafficking charges, Leon Black, Apollo’s billionaire C.E.O., was asked about his decades-long ties with the financier. Mr. Black played it down, but The Times reports that the two had a far deeper relationship than previously known, in which Mr. Black paid tens of millions to Mr. Epstein over a decade.

Among The Times’s findings:

• A company that owned Mr. Black’s yacht wired $22.5 million in 2017 to a company that managed Mr. Epstein’s private jet, a transfer that raised questions at Deutsche Bank.

• That same Black-controlled company donated $10 million in 2015 to a charitable foundation created by Mr. Epstein.

• Mr. Epstein received several million dollars from another Black-controlled company that the Apollo chief used to buy much of his billion-dollar art collection.

• Mr. Black donated at least $5 million to Harvard professors, a process facilitated by staff members for Mr. Epstein (who himself had been blocked by Harvard following his 2008 guilty plea in Florida to a sexual crime charge involving a minor).

Over all, Mr. Black may have paid Mr. Epstein as much as $75 million, sources told The Times. Those fees help explain how Mr. Epstein amassed an estate worth more than $600 million in the years after his most lucrative client, Les Wexner, had cut him off.

Mr. Black’s response: A spokeswoman for the billionaire said that the relationship ended amid a fee dispute in 2018, and that Mr. Black was “appalled” by Mr. Epstein’s conduct. She added that Mr. Black was cooperating with an investigation into Mr. Epstein by the Virgin Islands government.

The disclosures are a headache for Apollo. Mr. Black’s spokeswoman said that Mr. Epstein never did work for the $414 billion investment firm, but investors may raise questions about Mr. Black’s previous comments downplaying his Epstein ties all the same.


Today’s DealBook Briefing was written by Andrew Ross Sorkin and Lauren Hirsch in New York, Ephrat Livni in Washington, and Michael J. de la Merced and Jason Karaian in London.



Credit...Ringo Chiu/Reuters

Paul Milgrom and Robert Wilson win this year’s Nobel in economics. The Stanford economists study auction theory, and helped design new auction formats for things that are difficult to sell in the traditional way, like radio frequencies, discoveries that are “of great benefit to society,” the prize committee said.

Microsoft shows more flexibility on remote working. The company said that it will let most employees do more work remotely, some permanently, when it reopens its offices. (The tech giant’s C.E.O., Satya Nadella, had previously expressed skepticism about all-remote environments.) Tech companies embracing hybrid office models are facing challenges on how much fully remote workers should be paid when they move from high-cost West Coast cities.

Regeneron’s C.E.O. says President Trump’s endorsement doesn’t help much. Leonard Schleifer told CBS’s “Face the Nation” that Mr. Trump’s treatment with the company’s experimental antibody cocktail is a “case of one” and needs further study in clinical trials. The president has touted the drug as a “cure” and promised such treatments will be made widely available, but here’s reason to be skeptical of that claim.

The Bank of England asks banks if they’re ready for negative interest rates. The central bank’s queries follow a recent announcement that it was weighing cutting rates to below zero to help bolster Britain’s economy. But officials emphasize that they have not made up their mind on whether to take such a drastic step.

The L.A. Lakers’ championship caps the N.B.A.’s season in the bubble. The victory not only means another trophy for the Lakers and for LeBron James, but it also signals a successful end to a season with strict coronavirus protections, played without spectators in a sealed facility at Disney World. In other sports, the N.F.L. was forced to reschedule more games this week after positive Covid tests.


Credit...Erin Scott/Reuters

The gap between the Democrats’ proposed $2.2 trillion relief package and the White House’s $1.8 trillion offer may look relatively small, in the grand scheme of things. But an agreement on the aid that many say is needed to keep the economic recovery on track seems as remote as it was a week ago, when President Trump called off negotiations, despite frenzied talks in the days since.

A quick catch-up:

Oct. 6: “I have instructed my representatives to stop negotiating until after the election,” Mr. Trump tweeted. A few hours later, he said he was willing to sign stand-alone bills that would finance stimulus checks, small-business loans and airline aid. Jay Powell, the Fed chair, warned of “tragic” consequences if no stimulus was forthcoming. The S&P 500 fell 1.4 percent.

Oct. 7: “Move Fast, I Am Waiting To Sign!” Mr. Trump tweeted at Nancy Pelosi, the House Speaker. The S&P rose 1.7 percent.

Oct. 8: Analysts start pricing in better odds of a deal getting done. The S&P rose 0.8 percent.

Oct. 9: “Covid Relief Negotiations are moving along. Go Big!” Mr. Trump tweeted. He said he was inclined to be more generous than either Democrats or Republicans, but Mitch McConnell, the Senate Majority Leader, said a deal was “unlikely in the next three weeks.” No matter: the S&P rose 0.9 percent, ending a tumultuous week with a gain of around 4 percent.

Oct. 10: Ms. Pelosi wrote a letter calling Republican proposals “insufficient,” although she remained “hopeful” that a deal could be struck. For their part, some Senate Republicans complained that a big spending package could cost them seats among fiscally conservative voters.

Oct. 11: The White House chief of staff, Mark Meadows, and Treasury Secretary Steven Mnuchin wrote to lawmakers urging them to “come together and immediately vote on a bill,” tapping unused funds from the first round of stimulus. Ms. Pelosi wrote another letter saying that talks were at an “impasse,” with disagreements over the nature of the aid rather than the size of the bill. On Fox News, Mr. Trump said “Republicans want to do it” and blamed Ms. Pelosi for the stalemate.

Oct. 12: At the time of writing, stock futures are up 0.4 percent. Hope springs eternal.

As lawmakers wrangle over a new economic aid package, measures from the first pandemic relief bill, the CARES Act, are mostly talked about in the past tense: checks were sent to households, small-business rescue loans have been written and extra unemployment insurance has expired. But corporate tax breaks in the CARES Act continue to flow, and will for years in their current state.

Losses become gains. Among other things, the CARES Act allows losses from 2018, 2019 and 2020 to offset taxes in the previous five years. That means that companies can get refunds for the years before the 2017 tax cut, based in part on losses incurred before the pandemic. And those losses can also be applied, in full, to future years, relaxing a rule that limited this practice to reduce the cost of 2017 tax cut.

• The technicalities are dizzying even for the experts, said San Jose State University’s graduate tax program director, Annette Nellen, who trains corporate accountants on how they work. But she told DealBook that the provisions mostly benefit a small subset of companies. The Washington Post reports that energy companies have been particularly big beneficiaries, and the same goes for real estate groups. It also makes acquiring companies to harvest their tax losses more attractive.

The state of play. The Joint Committee on Taxation estimated that the loss carryback provision of the CARES Act would cost $25 billion over 10 years, or about 5 percent of the bill’s net effect. There are larger aspects of the stimulus efforts that are at the center of the current negotiations, but business tax breaks are also up for debate. And since The Times’s revelations of President Trump’s extensive use of corporate losses to reduce his tax bill, the spotlight on these breaks has become brighter, one of the many bones of contention between the parties trying to hash out a deal.

• Democrats seeking to renew stimulus measure in recent months have sought to repeal the loss carrybacks in the CARES Act. Representative Lloyd Doggett, Democrat of Texas, co-sponsored a bill to undo the business tax provisions in the original stimulus and target new breaks at smaller firms. “Aware that this is the same type of loss carryback provision Trump has exploited, his Republican enablers continue resisting repeal,” he told DealBook.


Credit...Nolis Anderson for The New York Times

As companies try to bolster diversity and inclusion plans following social justice protests, they are reaching out to Black employees for help. “For many Black professionals,” Jennifer Miller writes for The Times, “the experience of being asked — or even required — to lead or participate in a company’s diversity and inclusion work simply because of their race is an uncomfortable ritual.”

“They’re looking at me as a Black woman, which means I’m automatically equipped to deliver diversity, equity and inclusion,” said Deana Jean of a recent approach she received on LinkedIn. She is a leadership coach, but not in that area, and declined the request. When she asked whether the company was looking for a sales consultant, there was no reply.

• Such requests can undermine inclusion efforts they are supposed to promote, imposing personal discomfort and the emotionally taxing work on people who aren’t trained to take it on. “To assume that every Black person has the skills and desire and knowledge for this work is tokenization,” said Michelle Kim of Awaken, a consulting firm that specializes in diversity, equity and inclusion. These and other firms are ready to help companies run programs the right way, with training and advice on setting boundaries and expectations for all involved.

⚖️ The confirmation hearing for Judge Amy Coney Barrett, President Trump’s nominee for the Supreme Court, begins today with opening statements. (Read Judge Barrett’s opening statement here.) She faces questioning from Senate Judiciary Committee members — including Kamala Harris, the Democratic vice presidential candidate — on Tuesday and Wednesday, with outside witnesses testifying on Thursday.

🛍 Amazon Prime Day, postponed from its usual time in July, takes place on Tuesday and Wednesday. The online retailer’s rivals, including Best Buy, Target and Walmart, are holding similar sales events this week in an effort to limit in-store crowds and encourage shoppers to get their holiday purchases in well before Black Friday.

📱 Apple will unveil its latest series of iPhones on Tuesday, promising the first major redesign in years and 5G capability.

💰 Third-quarter earnings season kicks off this week, and all eyes will be on the banks. The Fed has expressed worry about the health of the financial system without fresh stimulus, which will be the main talking point when bank chiefs present their latest results: JPMorgan and Citigroup are first up on Tuesday, followed by Bank of America, Goldman Sachs and Wells Fargo on Wednesday and Morgan Stanley on Thursday.

🗣 Other companies reporting earnings include the airlines Delta on Tuesday and United on Thursday, which will face questions about how deep they might downsize without extra government cash; the health care groups Johnson & Johnson on Tuesday and UnitedHealth on Wednesday, with updates on the progress of Covid treatments; and the French luxury giant LVMH on Thursday, with news of its court battle to get out of the deal to buy Tiffany.


• Richard Branson’s Virgin Orbit satellite business is seeking to raise up to $200 million, at a $1 billion valuation. (WSJ)

• Can Morgan Stanley’s deal-making widen the gap with Goldman Sachs? (FT)

• The parent company of the Boston Red Sox and Liverpool soccer club is in talks to sell a stake to the RedBall Acquisition SPAC. (Bloomberg)

Politics and policy

• A record surge of money is flooding to Democratic candidates trying to take control of the Senate. (NYT)

• Over 200 companies, special-interest groups and foreign governments have patronized President Trump’s properties while reaping benefits from him and his administration. (NYT)


• European regulators are drawing up a “hit list” of big tech companies that will be subject to stricter rules to curb their market power. (FT)

• “The Digital Divide Starts With a Laptop Shortage” (NYT)

Best of the rest

• James Murdoch opens up to The Times’s Maureen Dowd: He left the family empire because of disagreements over Fox News, and never watched “Succession.” (NYT)

• One benefit of the pandemic, some executives say, is more family time. (NYT)

• “Everybody Wants a Chief of Staff, Even When They Don’t Know Why” (Protocol)

US Market | Futures Indicator: S&P 500 futures rise slightly as stimulus negotiations continue


Jesse Pound

S&P 500 futures rose slightly Monday morning as investors prepared for a busy week of corporate earnings and monitored stimulus negotiations in Washington.

Futures for the S&P 500 gained 0.5% and Nasdaq 100 futures traded higher by 1.3%. Dow Jones Industrial Average added 19 points. The move implied 70-point gain by the Dow at the open.

Tech stocks led the premarket gains with Apple and Amazon both up around 2%.

The gains follow a strong week for the stock market. The Dow jumped 3.3% to post its biggest one-week gain since August, while the S&P 500 and Nasdaq Composite gained 3.8% and 4.6%, respectively, for their best weeks since July.

“Markets last week appeared to price perceived election clarity, and with it, a growing likelihood of additional fiscal stimulus – at least in the pipeline. This was reflected from small cap outperformance to rising Treasury yields,” Julian Emanuel, BTIG’s chief equity and derivatives strategist, said in a note to clients Sunday.

Traders are still holding out hope for some sort of stimulus even as chances for another round before the election appeared to dim over the weekend. Both House Speaker Nancy Pelosi, D-Calif., and Senate Republicans pushed back on a $1.8 trillion offer from the White House.

In a letter to colleagues, Pelosi highlighted what she said were insufficient offers on healthcare issues.

“The news is filled with the numbers in terms of dollars. The heart of the matter is: can we allow the virus to rage on and ignore science as the Administration proposes, or will they accept the scientific strategic plan in the Heroes Act to crush the virus,” Pelosi said, referring to a bill that Democrats already passed in the House.

Meanwhile, Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows called for a separate vote on the Paycheck Protection Program in their own letter to Congress on Sunday.

The apparent impasses follows a whirlwind week in Washington that saw President Donald Trump at one point call off negotiations, saying that Congressional Republicans should focus on confirming Amy Coney Barrett to the vacant Supreme Court seat. Trump then reversed his position and said to “go big” in negotiations.

Monday’s session could also see investors and traders adjusting their positions before the third quarter earnings season kicks into high gear later in the week. Several major banks and airlines are slated to report their results, including JPMorgan Chase and Delta Air Lines on Tuesday.

While results for the period are expected to decline significantly, traders believe the results could come in much better than expected.

News | Business | Central Banks | Bank of England: Bank of England asks banks about readiness for negative rates


1 minute - Source: CNBC

Mounted police officers sit in outside the Royal Exchange and the Bank of England in London on June 17, 2020.

Mounted police officers sit in outside the Royal Exchange and the Bank of England in London on June 17, 2020.

TOLGA AKMEN | AFP via Getty Images

The Bank of England asked banks on Monday for information about their readiness for the possibility of zero or negative interest rates, following up on its announcement last month that it was considering how to take rates below zero if needed.

“As part of this work, we are requesting specific information about your firm’s current readiness to deal with a zero Bank Rate, a negative Bank Rate, or a tiered system of reserves remuneration – and the steps that you would need to take to prepare for the implementation of these,” Deputy BOE Governor Sam Woods said in a letter to banks. 

News | Business | Chinese Tech: China hands out $1.5 million of its digital currency in one of the country's biggest public tests


Arjun Kharpal

A Chinese clerk counts renminbi yuan banknotes at a bank in China on December 2015.

A Chinese clerk counts renminbi yuan banknotes at a bank in China on December 2015.

Jie Zhao | Corbis News | Getty Images

GUANGZHOU, China — China has started one of the biggest real-world trials for its digital currency as it pushes closer toward creating a cashless future.

Last week, the government in Shenzhen carried out a lottery to give away a total of 10 million yuan (about $1.5 million) worth of the digital currency. Nearly 2 million people applied and 50,000 people actually won.

The winners can now download a digital renminbi app to receive the digital yuan and spend it at over 3,000 merchants in a particular district of Shenzhen. The south China technology hub is home to some of the country’s biggest tech giants including Huawei and Tencent.

Local supermarkets and pharmacies are among the participating merchants as well as Walmart, according to a post by the Shenzhen government messaging app WeChat.

China has been pushing toward a cashless society.

The digital yuan is not a cryptocurrency like bitcoin. Instead, it is issued and controlled by the People’s Bank of China, the country’s central bank. It is not looking to replace digital wallets like Alipay or WeChat Pay. It will likely work together with them and other banks.

In comparison, Bitcoin is decentralized, which means it’s not owned and controlled by one entity, and it is not distributed by a central bank.

China’s digital yuan has been in the works for the past few years and there have been just a handful of small trials across the country. The Shenzhen pilot appears to be the biggest so far.

Central banks around the world are exploring the idea of issuing digital currencies. Last week, the Bank for International Settlements and seven central banks published a framework for central bank digital currencies, or CBDCs.

News | Business | UK Hospitality Industry: Hospitality sector in legal action over lockdowns


4 minutes - Source: BBC

Restaurant in Middlesborough in Octoberimage copyrightIan Forsyth

The UK hospitality industry has said it will take legal action to stop new local lockdown rules that could force pub, clubs and other venues to close.

Trade body the Night Time Industries Association (NTIA) said there was no evidence that hospitality venues contributed to the spread of Covid-19.

It comes as the government prepares to unveil new restrictions for England.

NTIA boss Michael Kill said the hospitality industry had been left with "no other option".

"These new measures will have a catastrophic impact on late night businesses, and are exacerbated further by an insufficient financial support package presented by the chancellor in an attempt to sustain businesses through this period," he said.

"This next round of restrictions are hugely disproportionate and unjust, with no scientific rationale or correlation to Public Health England transmission rates, when compared to other key environments."

The Liverpool City Region is expected to face the tightest restrictions under a new "three tier" system, which will classify regions as being at a "medium," "high" or "very high" level of alert.

In the most infectious areas, pubs, bars and other hospitality and leisure businesses are likely to be forced to close, as has happened in parts of Scotland.

The chancellor has promised to pay two-thirds of workers' wages if employers are forced to close due to the new rules.

But some fear this will not be enough and there could still be a big impact on jobs, said Dame Carolyn Fairbairn, director general of business lobby group the CBI.

Carolyn Fairbairnimage copyrightGetty Images

image captionDame Carolyn Fairbairn said the government needed to "show its workings"

"It is particularly hard for hospitality who worked so hard to get their premises Covid-safe, but also the supply chains that depend on them," she told the BBC's Today programme.

"I think they do want to see a much more evidence-based approach - the government needs to show its workings."

Leaders in northern England, which has been hard hit by the new surge in coronavirus cases, are supporting NTIA's call for a judicial review.

So too are the British Beer and Pub Association and two of the country's biggest pub operators, JW Lees and Joseph Holt, alongside 10 other organisations.

Sacha Lord, Manchester's Night Time Economy Adviser, said: "Once again the government wants to shut down pubs and bars, but this cannot keep happening and we need to understand why the hospitality industry is being isolated like this - where is the scientific evidence to suggest closing venues suppresses transmission?"

Manchester Mayor Andy Burnham said many workers faced hardship if their employer was forced to close.

"The government is treating hospitality industry workers as second-class citizens. Many of them are already on the minimum wage and there is no justification for a furlough scheme that pays two-thirds of their wages when workers in other industries were given four-fifths," he said.

The government is already facing a legal challenge over its decision to impose a 10pm curfew on English pubs.

Jeremy Joseph, boss of the G-A-Y club group, said the curfew was detrimental to hospitality businesses and "makes absolutely no sense".

"It does the opposite of protecting people by pushing them onto the street at the same time. They are going from being safe inside venues with staggered closing times to unsafe on overcrowded streets and overloaded public transport."

News | Chinese Coronavirus | Covid-19: China to test entire city for Covid-19 in five days


QINGDAO, CHINA - FEBRUARY 03 2020: A government worker checks the temperature of a woman in home quarantine in Qingdao in east China's Shandong province Monday, Feb. 03, 2020. Image copyright Barcroft Media
Image caption The coastal city of Qingdao confirmed a small number of cases on Sunday

The Chinese city of Qingdao is testing its entire population of nine million people for Covid-19 over a period of five days.

The mass testing comes after a dozen cases were found linked back to a hospital treating coronavirus patients arriving from overseas.

In May, China tested the entire city of Wuhan - home to 11 million people and the epicentre of the global pandemic.

The country has largely brought the virus under control.

That's in stark contrast to other parts of the world where there are still high case numbers and lockdown restrictions of varying severity.

In a statement posted to Chinese social media site Weibo, Qingdao's Municipal Health Commission said six new cases and six asymptomatic cases had been discovered.

All the cases were linked to the same hospital, said the Global Times.

The Chinese authorities now have a strategy of mass testing even when a new coronavirus cluster appears to be relatively minor, correspondents said.

City-wide testing

The commission added that a citywide testing program had been launched, with five districts to be tested within three days - and the whole city to be tested within five days.

Some 114,862 people - including medical staff and newly hospitalised patients in the city's hospitals - have already tested negative for the coronavirus, it said.

Videos circulating online showed local residents lining up late on Sunday to get tested, said the Global Times, adding that some of these test points were open from 07:00 to 23:00.

The new cases come a week after China's Golden Week holiday - which saw millions travel across the country.

A Global Times report quoting the Qingdao Municipal Bureau of Culture and Tourism said the city had received 4.47 million passenger trips over this period.

The nearby city of Jinan, which is also in the same province as Qingdao, called for anyone who had visited the city since 23 September to get tested for the virus, according to a report by The Paper.

Earlier last month, Qingdao announced that two port workers in the city who handled imported seafood had tested positive for the virus. However, they were not known to have infected anyone else.

Daily coronavirus infections have fallen drastically in China, and for the most part the country appears to have recovered from the worst of the virus.

China currently has 85,578 virus cases and the death toll stands at 4,634.

Earlier this year, China completed a mass testing programme in Wuhan saying 11 million people had been tested in 10 days.

However, the BBC's Reality Check later estimated that the figure was closer to 9 million over 10 days - still a significant number of people.

Hundreds of testing centres were opened, with thousands of testing staff involved.

News | US Politics: Supreme Court pick vows to 'apply law as written'


8-10 minutes Source: BBC

Amy Coney Barrett Image copyright Reuters
Image caption Judge Barrett said policy decisions were for elected politicians, not Supreme Court justices

US President Donald Trump's pick for a Supreme Court vacancy will later tell senators that she will judge legal cases impartially "whatever my own preferences might be".

Conservative jurist Amy Coney Barrett faces a four-day confirmation hearing in the Senate that starts on Monday.

If approved, Judge Barrett, 48, will replace liberal Justice Ruth Bader Ginsburg, who died recently aged 87.

Judge Barrett's nomination for the role has proved politically controversial.

It was announced by Mr Trump at the end of September, and the Republicans are trying to complete the process before he takes on Democratic rival Joe Biden in the 3 November presidential election.

Should Judge Barrett's nomination be confirmed, conservative-leaning justices will hold a 6-3 majority on the Supreme Court, shifting its ideological balance for potentially decades to come.

Who is Amy Coney Barrett?

  • favoured by social conservatives due to record on issues like abortion and gay marriage
  • a devout Catholic but insists her faith does not influence her legal opinion
  • is an originalist, which means interpreting US Constitution as authors intended, not moving with the times
  • lives in Indiana, has seven children including two adopted from Haiti

Read more: Who is Trump's Supreme Court pick?

The court's nine justices serve lifetime appointments, and their rulings can shape public policy on everything from gun and voting rights to abortion and campaign finance.

Democrats fear Judge Barrett's successful nomination would favour Republicans in politically sensitive cases that reach the Supreme Court.

Judge Barrett is the third justice to be nominated by President Trump, after Neil Gorsuch in 2017 and Brett Kavanaugh in 2018.

What will Judge Barrett tell senators in her opening remarks?

In what is effectively an interview for the job, the confirmation hearing will give Judge Barrett a chance to explain her legal philosophy and qualifications for the lifetime post.

In prepared remarks released ahead of the hearing, Judge Barrett thanks President Trump for "entrusting me with this profound responsibility", which she calls the "honour of a lifetime".

In the speech, Judge Barrett, who has seven children, will speak of the importance of her family and how her parents prepared her for a "life of service, principle, faith, and love".

Media captionAmy Coney Barrett: "I will meet the challenge with both humility and courage"

Judge Barrett will pay tribute to judges she has worked with, including former Supreme Court Justice Antonin Scalia.

Justice Scalia's reasoning "shaped me", Judge Barrett will say. "His judicial philosophy was straightforward: A judge must apply the law as written, not as the judge wishes it were."

Judge Barrett will say she has "resolved to maintain that same perspective" in her legal career.

It is up to elected politicians to make "policy decisions and value judgments", not Supreme Court justices, Judge Barrett will say.

"In every case, I have carefully considered the arguments presented by the parties, discussed the issues with my colleagues on the court, and done my utmost to reach the result required by the law, whatever my own preferences might be," she will say.

"When I write an opinion resolving a case, I read every word from the perspective of the losing party. I ask myself how would I view the decision if one of my children was the party I was ruling against."

What's the confirmation process?

After the confirmation hearing, the Senate - the upper chamber of the US Congress - will vote to confirm or reject Judge Barrett's nomination.

Republicans hold a slim majority, but they already appear to have the 51 votes needed to get Judge Barrett confirmed.

Senate majority leader Mitch McConnell has vowed to hold a confirmation vote before the presidential election.

Barring a surprise, Democrats seem to have few procedural options to prevent her gliding through the Senate to the Supreme Court bench.

Conservatives see chance to turn legal tide

The shifting ideological balance of the court will have an impact in all areas of American life and across the US - perhaps in no place more than Texas.

While the political row over Trump's appointment is taking place in Washington DC, some of the biggest legal fights that have made it to the Supreme Court in recent years have come out of Texas.

The state, which made a habit of pushing the boundaries of conservative law and causes, didn't always win those high-profile cases. On anti-sodomy law, voting rights, the death penalty and, most recently, abortion, it was often on the short end of the judicial stick, many times by narrow, 5-to-4 decisions.

With Justice Ginsburg gone and Judge Barrett poised to take a seat on the court, however, conservatives in Texas are optimistic that the legal tide may be turning.

Read more: Anthony's full analysis on the Supreme Court battle

Why is Judge Barrett's nomination so controversial?

Since Ginsburg's death from cancer on 18 September, Republican senators have been accused of hypocrisy for pressing ahead with a Supreme Court nomination during an election year.

In 2016, Mr McConnell refused to hold hearings for Democratic President Barack Obama's nominee for the court, Merrick Garland.

Media caption2016 v 2020: What Republicans said about choosing a Supreme Court justice in an election year

The nomination, which came 237 days before the election, was successfully blocked because Republicans held the Senate and argued the decision should be made outside of an election year.

This time around, Mr McConnell has lauded Judge Barrett's nomination, saying the president "could not have made a better decision."

Democrats say the Republicans should stand by their earlier position and let voters decide. However, Republicans counter that the Democrats have also changed their stance since 2016.

Mr Biden has called Mr Trump's efforts to appoint a justice an "abuse of power".

He has so far refused to comment on whether the Democrats would attempt to add seats to the Supreme Court if he won the presidential election.

Democrats have urged Judge Barrett to not take part in any cases involving the outcome of the presidential election and an upcoming challenge to a health law known as Obamacare.

They argue that, because she was nominated by President Trump during an election campaign, it would not be ethical for her to make a judgement on such cases.

Democrats have also raised concerns about an outbreak of coronavirus among senior politicians, including some Republicans involved in Judge Barrett's nomination hearing.

But keen to press ahead with the nomination, Republican leaders have rejected pleas to delay the hearing.