Wall Street reckons with “Never Trump” never happening

Presented by Mastercard: Delivered daily by 8 a.m., Morning Money examines the latest news in finance politics and policy.

Dec 11, 2023 View in browser   By Sam Sutton Presented by Editor’s note: Morning Money is a free version of POLITICO Pro Financial Services morning newsletter, which is delivered to our subscribers each morning at 5:15 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day’s biggest stories. Act on the news with POLITICO Pro. QUICK FIX NEW YORK — Wall Street’s top GOP donors are slowly realizing that former President Donald Trump is all-but-certain to clinch the nomination. While billionaires and their strategists continue to throw Hail Marys, they’re also thinking about when to throw in the towel. “The Street still hopes for somebody else,” Thomas Peterffy, the GOP mega donor and founder of Interactive Brokers, told POLITICO from the sidelines of the Goldman Sachs U.S. Financial Services Conference last week. The odds are exceedingly narrow, even with former Ambassador Nikki Haley’s recent surge in the polls. If Haley, Florida Gov. Ron DeSantis or another Republican fails to overtake Trump, Peterffy said he still hopes for a brokered GOP convention — which hasn’t happened since Thomas Dewey was on the ballot in 1948 — or a viable, as-yet unannounced No Labels candidate. The risks of a second Trump presidency are “incalculable and unpredictable,” he said. Of course, Peterffy has previously gone on record as saying that he would likely vote for Trump in 2024 if the former president clinches the nomination. Peterffy’s comments reflect the collective angst of Wall Street Republicans whose views on Trump are completely divorced from those of the GOP base, according to conversations with more than a dozen bankers, attorneys, political consultants and asset managers. There was a period when it seemed as though Trump might fade, allowing a younger, calmer alternative to take his place. Instead, the opposite happened. A series of criminal indictments have had no effect on Trump’s popularity. Some believe it crystallized his support. Now, unless Haley or DeSantis pull off the impossible — or if there’s a deus ex machina event that upends the political world — high-dollar GOP donors will soon face an uncomfortable decision as to how to proceed. “My sense is Wall Street will be somewhat split on a Trump-Biden rematch,” former Republican Sen. Bob Corker of Tennessee told MM. “The border issue, foreign policy, regulation, trade, stability and mental clarity will weigh on people in varying ways.” For some, the thought of a second Trump term will be enough to keep them off the field. Wall Street likes predictability. And while some of the finance industry’s kingmakers might blanch at the thought of four more years of President Joe Biden, the potential dysfunction of a second Trump term could raise existential questions about the future of American democracy. Setting aside Trump’s recent noodling on what he could accomplish in a one-day dictatorship, markets are increasingly wary of how U.S. political disruptions can ripple across the global financial system. Contested elections and January 6-style spasms of political violence now affect the market for U.S. Treasury securities. The uncertainty over Trump’s broader agenda, or who he might tap to execute that agenda, has muted any enthusiasm for some of his pro-business leanings. Still, many in the financial services world expect GOP donors to fall in line behind Trump, even if they were repelled by his denial of the 2020 election results and alleged criminal activity. If they choose to engage with the former president, Trump allies say the door is open. “Trump is so much better than any of these candidates for Wall Street, when it comes to ballooning the economy and allowing for the free flow of business and competition,” said Constellations Group CEO Bill White, a Trump fundraiser who previously led the Intrepid Museum in New York City. White added that the former president will welcome big ticket donors back into the fold “with open arms,” even if they’ve already made contributions to his challengers. To the extent there are any concerns about a Trump dictatorship, no one in his circle has raised any alarms. “People want President Trump to be strong. They know, a weak president — like the one we have now — is very dangerous for our global stability, our global economy,” White said. IT’S MONDAY — Welcome to the working week. And as always, send tips and suggestions to Sam at ssutton@politico.com and Zach at zwarmbrodt@politico.com A message from Mastercard: Small businesses are the backbone of our communities, and Mastercard understands that every business has unique needs. Alongside partners, Mastercard supports small business owners with innovative and tailored tools, resources and solutions. With Mastercard, small businesses can connect to capital, technology, financial tools and more, to help grow and protect their business every step of the way. Learn more about how Mastercard supports small businesses at mastercard.us/smallbusiness.   Driving the Week Tuesday … The Consumer Price Index for November will be released at 8:30 a.m. … The Atlantic Council hosts a panel on de-dollarization at 9:30 a.m. … House Financial Services has a subcommittee hearing on energy sanctions at 10 a.m. … Senate Appropriations has a subcommittee hearing on disaster recovery funds at 10 a.m. … House Financial Services has a subcommittee on self-regulatory organizations for auditing and accounting at 2 p.m. … Wednesday … The Producer Price Index for November will be released at 8:30 a.m. … House Financial Services has a subcommittee hearing on Iran sanctions at 9 a.m. … The Peterson Institute for International Economics hosts a Basel III panel at 9 a.m. … The CFTC holds an open meeting at 9:30 a.m. … The SEC holds an open meeting on its central clearing rule at 10 a.m. … House Energy and Commerce has a hearing on the economic impact of AI at 10 a.m. … Federal Reserve Chair Jerome Powell holds his post-Federal Open Market Committee meeting press conference at 2:30 p.m. … Thursday … U.S. retail sales and the import price index for November will be released at 8:30 a.m. .. Sen. Jack Reed (D-R.I.) and Treasury Undersecretary for Domestic Finance Nellie Liang will speak at a Brookings Institution event on financial data collection at 9 a.m. … Friday … The CFTC has a closed meeting at 9 a.m. Cannabis — The cannabis banking bill is dead for 2023, concedes Montana Sen. Steve Daines, a key Republican backer of the long-stalled legislation, our Natalie Fertig reports. A bipartisan group of lawmakers across both chambers are forging ahead with negotiations to potentially pave the way for passage next year. Watch this space — This week’s Treasury auction will test the market’s ability to absorb U.S. government debt. Why does that matter? “Investors fear that signs of weak demand might spread similar tumult, raise the cost of government borrowing and hurt the economy,” writes The WSJ’s Eric Wallerstein. Congress Not so lame duck — Zach scored an interview with House Financial Services Chair Patrick McHenry (R-N.C.) on the heels of his retirement announcement. Don’t expect him to take it easy now that he’s headed for the exits. Passing and enacting legislation on cryptocurrency, data privacy and capital formation are at the top of his agenda. — Committee Republicans want a briefing on how the OCC hired Kumar Bhardwaj to be its chief financial technology officer without catching that he applied for the job with a resume that was reportedly full of lies, Jasper Goodman reports. On campus — University of Pennsylvania President Liz Magill resigned over the weekend, days after her appearance at a House Education hearing last week, our Bianca Quilantan reports. Magill, along with other college administrators, has been criticized by key donors including Apollo Global Management’s Marc Rowan for failing to quell antisemitic rhetoric on campus. Fed File It’s time to start thinking about rate cuts — Federal Reserve Chair Jerome Powell’s efforts to bring down the rate of inflation have been successful, The WSJ’s Nick Timiraos writes. The hard part comes next. If the Fed waits too long to lower rates, it could bludgeon growth and cause a recession. But if they move too quickly, it could cause consumer prices to spike — kicking off another inflationary surge. — The Fed isn’t the only central bank reckoning with this dilemma. “Central bankers are saying, ‘look, we’re waiting to see if what we’re seeing on this disinflation is sustainable,’” Joyce Chang, chair of global research at JPMorgan, told Bloomberg Television. “We think you’re not looking to see cuts until the second half of the year.” — What does slower inflation look like? For now, it’s cheap flights and lower prices for electronics and appliances, The WSJ’s Alison Sider and Jaewon Kang report.   A message from Mastercard:   Fly Around Nearly twice the CFTC’s annual budget request — Shohei Ohtani signed with the (evil) Los Angeles Dodgers in a 10-year, $700 million deal, The Athletic reports. (MM is San Francisco Giants territory) A message from Mastercard: Whether it’s setting up shop online, accepting digital payments, or boosting cybersecurity readiness, Mastercard connects small businesses with the support they need to help reach their goals. With Mastercard, small businesses can connect to capital, technology, financial tools and more, to help grow and protect their business every step of the way. And as part of Mastercard’s community, small business owners can hone their skills and learn new ones to help build, manage, and grow their enterprises. Small businesses are the backbone of our communities, and Mastercard understands that every business has unique needs. By helping business owners reach their goals, we’re helping make our economy stronger together. Learn more about how Mastercard supports small businesses at mastercard.us/smallbusiness.     Follow us on Twitter Mark McQuillan @mcqdc Zachary Warmbrodt @Zachary Victoria Guida @vtg2 Declan Harty @ @declanharty Eleanor Mueller @eleanor_mueller Katy O'Donnell @katyodonnell_ Sam Sutton @samjsutton   Follow us

To change your alert settings, please log in at https://www.politico.com/_login?base=https%3A%2F%2Fwww.politico.com/settings This email was sent to rouf@idiot.cloudns.cc by: POLITICO, LLC 1000 Wilson Blvd. Arlington, VA, 22209, USA Unsubscribe | Privacy Policy | Terms of Service