The World
Federal budget figures show a record $3.1 trillion deficit in the just-completed fiscal year equaling 15% of the U.S. economy — the largest since the government undertook massive borrowing to finance the final year of WWII. Meanwhile, investors say recent bond market sell-off may be just the start, as a post-election spending splurge by Congress could send yields higher. Separately, President Trump and Congress continue to pursue a second round of $1,200 stimulus checks — and Sen. McConnell says airline aid should be part of COVID aid but action is “unlikely in next 3 weeks” — as studies show stimulus payments targeted toward lower-income and unemployed people would be more effective at encouraging spending. U.S. stocks are on course for their best week since August, as investors welcomed signs pointing to a decisive result in the election. (Washington Post, Financial Times, CNBC, Washington Post-2, Wall Street Journal)
Europe’s hopes that an economic recovery was underway are fading: France downgraded its 4Q20 forecast pace of expansion from an already minimal 1% to zero. Spain’s central bank warned the government may impose restrictions that could produce a 12.6% economic contraction this year. Earlier this week, the European Central Bank’s chief economist cautioned that the 19 countries that share the euro currency may not recover from the disaster until 2022. (New York Times)
Unfavorable views of China have reached historic highs in many countries, as majorities say China handled the Covid-19 outbreak poorly, while China’s decision to join the W.H.O.’s vaccine distribution plan will help it to play a bigger role globally. Meanwhile, resurgent hotspots are eroding faith in ‘herd immunity,’ as infection rates rise again in cities where some hoped a form of protection had been achieved. (Pew Research Center, South China Morning Post, Financial Times)
Federal agents thwarted a plot to violently overthrow the government as well as kidnap and harm Michigan Gov. Gretchen Whitmer, in a plot foreshadowed on social media that reveals how brazen far-right armed extremist groups have become. The Wolverine Watchmen group is tied to the "boogaloo" movement, which is largely dedicated to eradicating the government and killing law enforcement officers. Meanwhile, Russia-backed accounts sites keep churning out content aimed at younger viewers and the political left, designed to peel them off from the Democratic party. (Detroit News, FBI Affidavit, Los Angeles Times, Washington Post, NBC News,NBC News-2)
President Trump’s promise to abruptly pull all U.S. troops from Afghanistan generated confusion, as the Pentagon indicated it had received no orders to alter plans for a conditions-based withdrawal and Afghan negotiators voiced concern that a hasty exit would intensify challenges to peace talks. In North Korea, speculation is building that it will unveil its latest weaponry at a huge parade this weekend to mark the 75th anniversary of the ruling Workers’ party. Kyrgyzstan’s president offered to resign after Russia warned of “chaos” following protesters’ claim to have seized ministries. In India, New Delhi launched an anti-pollution campaign to curb air pollution before winter, when the capital is regularly covered in toxic haze, and warned that filthy air could make the pandemic more dangerous.(Washington Post,, The Guardian, 38North.org, Financial Times, Hindustan Times)
The Justice Department filed suit against Yale University for race and national origin discrimination against applicants to Yale College — in particular, against Asian American and white applicants. Separately, Princeton settled its federal government female faculty pay gap case. (Yale Daily News, Inside Higher Ed)
More than 6.6 million Americans have already voted - 10 times the number who had voted at this stage in the 2016 election cycle - indicating a potentially record turnout for the Nov. 3 contest. (Reuters)
Economy
OPEC says the world’s richest countries have already reached “peak oil,” and expects demand in most developed countries to fall by about 27% over next 25 years. Further, the global aviation industry downturn has slashed demand for jet fuel, posing yet another obstacle to the oil market’s recovery. (Wall Street Journal, Wall Street Journal-2)
China’s currency jumped by the most in four and a half years as trading resumed after a long holiday, boosted by the country’s accelerating economic recovery and rising odds of a Biden presidency. (Financial Times)
Roughly one in six U.S. workers won’t get a raise in 2021. About a third of the 705 companies that participated said they have reduced the money budgeted for pay increases for next year. (Bloomberg)
PE sponsors need to factor in Covid-adjusted EBITDA to their LBO models as deal pipeline builds for 1Q21. (Private Equity Wire)
The U.S. is on pace to install record amounts of wind and solar this year. However, the trend might not last: This year's expansion is driven in part by the expiration of the wind production tax credit and a decrease in the investment tax credit available to solar projects. The last time the PTC expired, in 2012, the U.S. installed a then record 13 GW of wind. The next year, it failed to build a single gigawatt. (Scientific American)
Technology
WarnerMedia is restructuring its workforce to reduce costs by as much as 20%. The overhaul, which is expected to begin in the coming weeks, would result in thousands of layoffs across Warner Bros. studios and TV channels like HBO, TBS and TNT. Walt Disney and NBCUniversal have also cut jobs in recent months. (Wall Street Journal)
Microsoft is allowing its employees to work from home permanently. Employees who opt for the permanent remote work option will give up their assigned office space, but still have options to use touchdown space available at Microsoft’s offices. Meanwhile, Google released the first look at plans for its massive San Jose campus. (The Verge, CNBC, City of San Jose)
A new leak all four new iPhones to be announced next week will feature 5G support, including mmWave in the US. The Super Retina XDR display which was previously exclusive to the iPhone 11’s Pro models will apparently be available across the whole lineup this time, and the handsets are said to use ceramic in their glass screen construction to make them tougher and more drop resistant. All four will reportedly be able to film in the Dolby Vision HDR standard. (The Verge)
Political campaigns are flooding Facebook with ad dollars, as many other ad-supported sites have retreated from politics, leaving Facebook as the only game in town. Ads from politicians and campaigns accounted for at least 3% of Facebook’s estimated 3Q20 U.S. revenue. (CNBC)
Maps have suddenly become a new front in the antitrust war against Google. Credit for that goes to Mapbox, a growing rival to Google Maps that steered federal investigators to alleged abuses by the company. Now Congress’ recent report included a little-noticed allegation that Google Maps abused its market power and harmed its customers. (The Information)
Audio startups are multiplying as investors seek the next Clubhouse: Dozens of startups are betting that consumers—tired of texting and suffering from Zoom fatigue—will embrace audio as the next social media feature. Investors are freshly alert to the sector’s potential thanks to Clubhouse’s $100 million valuation, as well as the rise of Discord, a talk and text chat app valued at $3.5 billion. (The Information)
Smart Links
What graduates earn over their lifetimes — including incredibly useful charting tool that allows you to select up to 4 degrees and education levels to compare. (Brookings, The Hamilton Project)
Wealthy Americans rush to change estate plans, fearing Biden tax hikes. (Reuters)
What’s reopened and what’s still restricted in 16 cities around the world. (Washington Post)
Steve Case, Sen. Amy Klobuchar: How to get more VC funding to startups outside of NYC, Silicon Valley, and Boston. (Fast Company)
Broadway performances are now suspended through May 30, 2021. (Broadway League)
What do you get when you combine Shaq, MLK’s son, and former Disney executives? A SPAC. (Wall Street Journal)
Today is National Nanotechnology Day, so, of course, MIT.nano a nanometer-sized window into Covid-19. (MIT.nano)