Why Wall Street Likes Mayor Pete (and Harris and Biden)

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Why Wall Street is backing these three candidates

Big financial donors appear to have settled on a few favorites in the 2020 Democratic primary, Shane Goldmacher of the NYT reports: Joe Biden, Senator Kamala Harris of California and Mayor Pete Buttigieg of South Bend, Ind. That could give them a huge leg up on fund-raising.

Here’s who on Wall Street has been supporting them:

? Mr. Biden: Jim Chanos, the hedge fund mogul; and Brad Karp, a top lawyer to Wall Street banks.

? Ms. Harris: Marc Lasry, the hedge fund billionaire; Blair Effron, the veteran investment banker; Ray McGuire, the vice chairman of Citigroup; and Mr. Karp.

? Mr. Buttigieg: Tony James, the executive vice chairman of Blackstone.

There are a few reasons for their  support, according to Mr. Goldmacher. Donors like Mr. Biden’s ideological moderation and poll standing against Mr. Trump; Ms. Harris’s potential in primary contests and prospects of assembling an Obama-like multiethnic coalition; and Mr. Buttigieg’s youth, intellect and charisma.

Notably absent are hometown politicians like Senator Kirsten Gillibrand of New York and Senator Cory Booker of New Jersey, both of whom have long courted financial executives. (Executives are still giving them some donations, Mr. Goldmacher writes, out of longtime loyalty and pragmatism.)

Also absent are Senators Bernie Sanders and Elizabeth Warren, who have avoided courting big financial donors. The feeling is mutual: Each has proposed policies that some corporate executives say would hurt the U.S. economy.

Why it matters: “The momentum of big money in New York toward Mr. Biden, Mr. Buttigieg and Ms. Harris is mirrored in contributor circles nationally,” Mr. Goldmacher writes. And all the candidates are rushing to collect money ahead of a June 30 filing deadline for their latest financial hauls.

More: President Trump keeps trying to make health care an issue in 2020, against his party’s wishes.

Deutsche Bank may scale back its global trading business

The troubled German lender is reportedly considering shrinking or shutting parts of its non-European trading operations and putting billions in assets into a separate division, Stephen Morris and Olaf Storbeck of the FT report.

The bank is weighing a huge retrenchment of its equity and rates-trading units outside continental Europe, the FT reports, citing unnamed sources. It’s expected to unveil a renewed focus on advising on transactions and managing wealthy clients’ portfolios.

Deutsche Bank may also create a “bad bank” for up to €50 billion, or $56 billion, worth of trading assets. Such vehicles are used to insulate banks from problematic assets that can be sold off over time without affecting the finances of the main company.

The moves are part of Deutsche Bank’s Plan B, after the bank failed to agree on a merger with Commerzbank. Investors have been clamoring for proposals that will lift its sagging stock price.

The final self-help plan will most likely be announced next month, along with Deutsche Bank’s first-half financial results.

The Justice Dept. could soon approve T-Mobile’s Sprint deal

Antitrust regulators at the Justice Department could bless T-Mobile’s $26 billion takeover of Sprint as soon as this week, if the two sides can agree on asset sales that would create a new wireless carrier in the U.S., Cecilia Kang of the NYT reports.

Federal officials want T-Mobile and Sprint to sell the Boost Mobile brandand parts of their wireless spectrum holdings — the airwaves that carry data signals — to preserve competition in the U.S. market, Ms. Kang reports.

The Justice Department has spoken with potential buyers for those assets, including Dish Network, Charter Communications and Altice, Ms. Kang writes. The WSJ adds that Dish — a longtime wild card in the U.S. telecom industry — appears to be in the lead in that bidding.

The F.C.C.’s chairman, Ajit Pai, has already endorsed the deal, after the two companies agreed to similar measures. The full commission is expected to vote on the deal in the near future.

A pact with the Justice Department could scuttle a lawsuit by 10 states to block the deal. The states’ attorneys general have argued that letting T-Mobile and Sprint combine would harm consumers by reducing the number of big wireless carriers to three from four.

When ‘buying American’ won’t work

As public hearings on potential new tariffs on up to $300 billion worth of Chinese imports begin today, some U.S. businesses told Katy Stech Ferek and Josh Zumbrun of the WSJ that replacing those products with American-made counterparts is almost impossible.

? “Items to be hit by new tariffs include 273 categories of goods — such as consumer fireworks, fishing reels and electric blankets — for which China accounts for more than 90 percent of imports,” Ms. Ferek and Mr. Zumbrun write.

? “It would be great if I could just say, ‘I’m going to get my [fireworks] containers from U.S. companies,’ ” Stephen Pelkey, the C.E.O. of a fireworks company, told the WSJ. “They don’t exist.”

? “I don’t even know if we can get sewers or what we would have to pay them,” Scott Goldstein, the president of S. Lichtenburg, a window curtain importer, told the WSJ. He added that none of the U.S. textile producers that his company once worked with still exist.

Retailers are also bracing for pain. “Even for healthy chains, like Walmart and Costco, the new duties threaten the business formula that helped speed their rapid rise over the last few decades: Import cheap products from Asia and sell them at rock-bottom prices,” Nelson Schwartz and Sapna Maheshwari of the NYT write.

More: India raised its tariffs on U.S. imports, escalating a still-mostly-symbolic trade war with Mr. Trump. Chinese biotech companies are luring executives from U.S. drug makers with big pay raises.

Mario Draghi’s successor has a tough task ahead

The president of the European Central Bank is set to step down in October. His replacement — who could be picked as soon as this week — will have to grapple with a slowing economy and other political challenges that threaten Europe’s financial stability, Jack Ewing of the NYT writes.

? “Whoever succeeds Mr. Draghi will get the benefit of his tested arsenal of monetary tools for fighting credit crunches, fending off predatory bond investors and squelching banking crises.”

? “Mr. Draghi leaves some unfinished business. During his term, the central bank never succeeded in consistently pushing inflation to the official target of 2 percent, the level considered optimal for growth. In May, the annual inflation rate was 1.2 percent.”

? “Mr. Draghi will end his term without ever overseeing a rate increase. This month, seeing signs of slowing growth, the central bank said it would not raise rates sooner than the middle of next year.”

? “The central bank president, although not an elected official, needs political skills to sell the euro to a sometimes skeptical public and to withstand attacks from populists and people who never wanted a common currency and would still like to have their deutsche marks, francs or liras back.”

Huawei has a lot of ammunition for a patent fight

The Chinese company has started a battle with Verizon over patents. Susan Decker of Bloomberg points out that it has many more arrows in that quiver to fight back against U.S. efforts to squash its business.

Huawei has 56,492 active patents worldwide, according to the research firm AcclaimIP. They cover telecom, networking and other high-tech areas. Last year alone, Huawei received 1,680 U.S. patents.

And the company is showing more willingness to use them as weapons. It has already pressed Verizon to pay licensing fees for equipment that the Chinese company says infringes on 238 of its patents. (Though Verizon doesn’t use Huawei equipment itself, some of its vendors do.)

Huawei has a lot of incentive to fight back. Restrictions imposed by the Trump administration are expected to take a significant toll on its business: It’s reportedly preparing for a drop in global smartphone sales of as much as 60 million units, according to Bloomberg.

More: Huawei could build a decent phone without U.S. components — but for now, it can’t create a great one.

I.C.Y.M.I.: What the Harriet Tubman $20 might have looked like

Above is a design for a $20 bill featuring the abolitionist and former slave, created by the Bureau of Engraving and Printing, according to Alan Rappeport of the NYT.

Treasury Secretary Steven Mnuchin said any redesign featuring Tubman probably won’t appear until after President Trump leaves office — despite a metal engraving plate of the bill having been created.

Revolving door

Kees Van Dijkhuizen plans to step down as C.E.O. of the Dutch bank ABN Amro when his term ends next year.

David Hisco has quit as the C.E.O. of ANZ Bank’s New Zealand arm after a company inquiry found that he had wrongfully expensed personal charges to the firm.

Joaquim Levy resigned as the head of Brazil’s development bank after the country’s president, Jair Bolsonaro, threatened to fire him.

The speed read

Deals

? Three prominent I.P.O.s — CrowdStrike, Chewy and Fiverr — soared in their debuts last week, dispelling investor concerns in the wake of Uber’s shaky debut. (WSJ)

? Saudi Arabia’s crown prince, Mohammed bin Salman, said that he expected the oil giant Aramco to begin trading on a public stock market as soon as next year. (Bloomberg)

? Goldman Sachs is reportedly merging its various internal private equity divisions, creating a business with $140 billion under management — nearly as big as KKR. (WSJ)

? The London and Shanghai stock exchanges will finally link their systems, allowing investors to buy depository receipts in mainland Chinese companies. (FT)

? UniQure, a gene-therapy company with a market value of about $2.7 billion, is reportedly considering selling itself. (Bloomberg)

Politics and policy

? The board overseeing Puerto Rico’s debt restructuring announced a $35 billion deal that would reduce the value of bondholders’ stakes by an average of 60 percent. (CNBC)

? Here’s how lawmakers are proposing to reduce drug prices in the U.S. (NYT)

? Ivanka Trump and Jared Kushner reported up to $135 million in income for 2018, down from the previous year. (NYT)

? A New York State bill to give undocumented immigrants driver’s licenses has stalled amid opposition from suburban lawmakers. (NYT)

? Financial documents from the N.R.A. reportedly show that the group is in debt, and spending more on legal defenses while cutting back on gun-safety training. (WaPo)

Brexit

? Airbus is warning European governments to prepare for a no-deal Brexit. (Bloomberg)

? A major British trade group wants the next prime minister to listen to the business community more carefully during Brexit negotiations. (FT)

? Wealthy Americans are snapping up luxury British homes, taking advantage of a Brexit-weakened pound. (Bloomberg)

Tech

? Some couriers for food-delivery services like Uber Eats and Deliveroo in Europe are employing illegal migrants for low wages. (NYT)

? Facebook plans to double its ad spending to rehabilitate its brands’ reputations in the wake of nonstop controversies. (WSJ)

? At a commencement speech at Stanford, Tim Cook of Apple warned Silicon Valley about claiming credit for innovations without taking responsibility for the consequences. (Business Insider)

? Products labeled “Amazon’s Choice” on Amazon’s platform aren’t curated by humans — they’re given the label by an algorithm, and some have serious defects. (BuzzFeed News)

? Meet the billionaire behind Epic Games, the studio that developed Fortnite. (WSJ)

? The website Genius has accused Google of stealing the lyrics it generates for songs. (WSJ)

Best of the rest

? Boeing’s C.E.O., Dennis Muilenberg, acknowledged a “mistake” in how the company handled a cockpit warning light in the 737 Max. (NYT)

? Nissan has reportedly expanded its internal investigation into Carlos Ghosn. (FT)

? BlackRock, Vanguard and State Street could enter the cross hairs of U.S. antitrust regulators as the firms come close to casting four out of every 10 votes at American companies’ boards. (FT)

? Western companies like G.E. and Siemens are accused of paying off Chinese officials to enter the country’s health care market. (NYT)

? Bayer plans to invest nearly $6 billion into alternative weedkillers as its Roundup product continues to face huge lawsuits. (FT)

? Impossible Foods hasn’t been able to keep up with demand after agreeing to supply Burger King with a plant-based Whopper burger. (NYT)

? The “yellow vest” movement in France appears to have run out of steam. (WSJ)

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