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Wait, Wall Street Is Pro-Biden Now?



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The suspense surrounding the next round of fiscal stimulus — will there or won’t there be a deal — has whipsawed markets this week. Investors first pushed stocks up on news of progress between Congress and the White House, only to pull back on Tuesday when President Trump said on Twitter that there would be no fresh stimulus. Mr. Trump then backtracked, demanding that Congress pass a relief bill, pushing the market up again.

But beneath the volatility, which reflects investors’ reaction to short-term developments, a subtle shift is occurring on Wall Street. Investors and analysts have begun to take into account the possibility that Mr. Trump’s time in the White House may soon be over, as Democratic presidential candidate Joseph R. Biden Jr. continues to pull ahead in polls just weeks before the election.

And that is producing some optimism on Wall Street, because many investors believe that the higher Mr. Biden climbs in polls, the lower the chance of a contested presidential election. An election with no clear winner and the fading prospects of another round of stimulus are two of the biggest threats to market stability.

Mr. Trump’s chaotic behavior in the first presidential debate, and his diagnosis of Covid-19 just days later, have been followed by polls showing Mr. Biden rising in several key swing states. On Wednesday, a new Quinnipiac University poll found that, among likely voters in the swing states of Florida and Pennsylvania, Mr. Biden had widened his lead over the president to 11 percentage points and 13 percentage points.

Also on Wednesday, the S&P 500 closed up 1.7 percent. The index has risen 2.5 percent since the first debate on Sept. 29. The market moves aren’t huge, but analysts say they are meaningful reflections of investors’ thinking at this point.

The outcome of the first debate increased “the odds of first Joe Biden becoming president, but also in line with the Democrats also taking the Senate,” said Shahab Jalinoos, global head of macro strategy with Credit Suisse in New York. “That’s obviously been a tailwind for markets since.”

Unified Democratic control in Washington is not usually high on Wall Street’s wish list, as it is associated with increased regulation and taxes. And some investors continue to have mixed feelings about a potential Biden agenda, which calls for higher taxes on corporations and the wealthy.

But largely, investors are of the view that a “blue wave” victory — in which Democrats retain the House of Representatives and retake the Senate as well as the presidency — represents the best chance to get another large injection of federal money into an economy that continues to struggle. Economists and policymakers, including the Federal Reserve chair, Jerome H. Powell, say such assistance is sorely needed, as job growth stalls, layoffs mount and temporary furloughs turn into permanent cuts.

Image“The cleaner the win, then the less likely that there is a disputed election” — a positive for the markets, said Shahab Jalinoos of Credit Suisse.
Credit…John Taggart for The New York Times

To tease out the underlying views of investors, analysts at JPMorgan Chase & Company recently assembled baskets of shares in companies they see as potential winners or likely losers in the event of a Biden victory.

Stocks of companies in the “winners” basket included industries such as health care, renewable energy, infrastructure and companies likely to benefit from better trade relations with China. Such companies could benefit from Mr. Biden’s support for the Affordable Care Act, which has funneled significant amounts of federal dollars into the health care industry. Infrastructure, engineering and renewable energy companies could also benefit from a major stimulus push, aimed in part at countering climate change.

Potential “losers” included companies with large numbers of minimum wage workers, defense contractors and energy companies, among others. Mr. Biden’s agenda calls for raising the minimum wage to $15 an hour, and weapons makers have been beneficiaries of the Trump administration’s focus on increasing sales of American weapons overseas.

Since early September, “the Democrat Agenda Outperformers have gained 10 percent relative to the Underperformers baskets, suggesting the U.S. equity markets have been pricing in a higher probability of a Biden Presidency,” the JPMorgan analysts wrote in a research note published last week.

In the government bond market, yields on long-term Treasury bonds — which have been languishing at some of the lowest levels on record — have moved sharply higher over the last week. That suggests some are pricing a combination of faster economic growth, higher inflation and rising government deficits over the future. (Treasury bond prices tend to fall during periods of fast economic growth, pushing yields — which move in the opposite direction — higher.)

“The odds of a Biden victory continue to rise, as do the chances of a blue sweep, and if the recent bid for risk assets is any guide, such an eventuality could prove a decidedly positive event for domestic equities — presumably at the expense of Treasuries,” Ian Lyngen, a bond market analyst with BMO Capital Markets, wrote earlier this week.

That sunnier outlook suggests investors now see an indisputable win for Mr. Biden and the Democratic Party as the most favorable outcome for the market, a conclusion that stems from two lines of reasoning.

For one, a clear victory for Mr. Biden cuts down on the chance of a contentious period after the Nov. 3 election that extends political uncertainty into the foreseeable future. In recent weeks, the possibility of a contested election — or even an outright constitutional crisis — was being priced into markets as Mr. Trump repeatedly refused to commit to a peaceful transfer of power.

The statements pushed jittery investors to cut back on their stock market risk over the last month. Starting in early September, the S&P fell for four consecutive weeks, coming close to dropping 10 percent. The likelier Mr. Biden is to notch a conclusive victory, the greater the amount of risk of political uncertainty that investors can take off the table.

“The cleaner the win, then the less likely that there is a disputed election,” said Mr. Jalinoos, of Credit Suisse. “Once you downgrade that risk, it tends to be a market positive.”

In recent days, Wall Street analysts have written that the likely large flood of federal stimulus that would follow a “blue wave” could cushion the blow of higher taxes by helping to increase economic growth more than previously expected.

“It would sharply raise the probability of a fiscal stimulus package of at least $2 trillion shortly after the presidential inauguration on Jan. 20, followed by longer-term spending increases on infrastructure, climate, health care and education that would at least match the likely longer-term tax increases on corporations and upper-income earners,” wrote analysts at Goldman Sachs this week.


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U.S. Weekly Jobless Claims Expected to Remain High: Live Updates



Families at a food bank in Vallejo, Calif., on Wednesday. Every week, more Americans join the ranks of the long-term unemployed — those out of work for more than 27 weeks.
Credit…Sarahbeth Maney for The New York Times

The latest evidence of stress in the labor market will come Thursday at 8:30 a.m. when the government releases its weekly report on unemployment claims.

Wall Street analysts surveyed by Bloomberg expect new state claims to remain above 800,000, an extraordinary high level in past recessions but a floor rather than a ceiling in this one. Hundreds of thousands of other claims will be filed under federal pandemic unemployment insurance programs.

The Labor Department’s report comes as coronavirus cases are again surging in the United States and as a second round of federal relief faces opposition from Senate Republicans over a possible $2 trillion price tag.

“For a long time, individuals, investors, and corporate leaders were expecting some kind of extension of federal aid,” said Kathy Bostjancic, chief U.S. financial economist at Oxford Economics. “I do think many households will begin to feel the pinch because of the lack of fiscal stimulus.”

Seven months into the pandemic, the nature of the job losses is also changing. The hope that business interruptions would be brief and that most laid-off workers would be quickly rehired has faded. Every week, more Americans join the ranks of the long-term unemployed, defined as those out of work for more than 27 weeks.

Workers no longer eligible for state unemployment insurance can still receive 13 weeks of benefits under the federal Pandemic Emergency Unemployment Compensation program. As a result, some reductions in state jobless rolls may not mean that people are back at work, but rather that they have shifted to the federal program.

The report on Thursday may hint at October’s unemployment rate, since the counting overlapped with the Labor Department’s monthly job survey.

The Federal Trade Commission said reported losses from scams originating on social media, especially Facebook and Instagram, reached a record high of nearly $117 million in the first half of the year.
Credit…Johanna Geron/Reuters

The pandemic-fueled boom in online shopping has been accompanied by a spike in complaints about scams originating on social media, especially Facebook and Instagram, according to the Federal Trade Commission.

Reported losses from such fraud reached a record high of nearly $117 million in the first six months of 2020, compared with $134 million in all of 2019, the F.T.C. said on Wednesday. The top sources of complaints were e-commerce sites that never delivered goods to consumers, many of whom said they had found the sites through Facebook or Instagram, which Facebook owns.

“These scam ads look real and can be carefully targeted to reach a particular audience,” the trade commission said in a report. “The scammers can delete comments on their ads or posts so that negative responses don’t show up and alert people to the con.”

People also reported losing money through so-called romance scams, in which fraudsters develop online relationships with people to obtain money from them, and through social media messages that offer “supposed economic relief or income opportunities,” the F.T.C. said.

The overall number of reports that people lost money to scams starting on social media in the second quarter more than tripled from a year earlier.

A pension fund for Pennsylvania teachers said it had frozen new investments with Apollo Global Management amid concerns about ties between its founder, Leon Black, and Jeffrey Epstein.

The $63 billion Pennsylvania Public School Employees’ Retirement System said it spoke with Apollo officials last week after a New York Times report detailed the financial ties between the two men. Mr. Black made at least $50 million in payments and donations to entities affiliated with Mr. Epstein in the years after Mr. Epstein’s 2008 conviction for soliciting prostitution from a teenage girl.

Mr. Black has said the fees he paid were for services such as estate planning and philanthropic advice. In a letter to investors after the report was published, Mr. Black said he had “never tried to conceal” the work Mr. Epstein had done for him. Mr. Black and Apollo said Mr. Epstein did no work for the firm.

On Tuesday, an Apollo spokeswoman said that the investment firm’s board had retained the law firm Dechert to conduct an independent review of the dealings between Mr. Black and Mr. Epstein. Mr. Black has said he would cooperate with all legal inquiries.

The pension fund had initially been planning to meet with Apollo officials this week, but moved up the meeting after reading the Times report and Mr. Black’s letter, said Steve Esack, a spokesman for the retirement system.

“After that October 13th phone conversation, P.S.E.R.S.’s investment team informed Apollo that it will not consider any new investments at this time,” Mr. Esack said in an email. The retirement system “is closely following the ongoing legal issues and the newly launched internal Apollo investigation,” he said.

That means the fund’s existing investments with Apollo, worth $918 million, will remain intact and gradually decline as the projects they financed are completed and the money is returned to the teachers’ pension fund. Pension fund commitments to private equity vehicles typically last for a number of years.

Other public pension funds that work with Apollo have not gone so far as to freeze investments.

Rob Maxwell, a spokesman for the Texas teachers’ retirement system, said that fund had already been in touch with Apollo and was “closely monitoring the activities that the firm and its board are taking.”

Wayne Davis, a spokesman for the California Public Employees’ Retirement System, said the fund called Apollo last week about Mr. Black’s relationship with Mr. Epstein and would continue to monitor the situation. The system expects its outside investment managers “to follow the same core values of integrity and accountability that guide our own investment decision-making,” Mr. Davis said.

A spokesman for the Illinois teachers’ pension system, David Urbanek, said it was “going to monitor this situation very closely as it continues to unfold,” but the trustees responsible for selecting and monitoring outside investment managers had not yet discussed the matter.

A spokeswoman for Scott Stringer, the New York City comptroller who sits ex officio on the boards of pension funds serving teachers and other workers, said, “We are troubled by these reports, and we are closely monitoring the situation in accordance with our fiduciary duty and to protect the interests of our pensioners.”

Shares of Apollo were up 2.6 percent on Wednesday, but are still down more than 12 percent since Oct. 12.


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An Electric Car With Swedish Roots, and a Rebellious Streak



More than 60 years ago, Volvo introduced the world to the three-point seatbelt, a safety feature so standard now that it’s almost an afterthought. Over the ensuing years, Volvo, the Swedish maker of bland, boxy sedans, gained a reputation for safety above all else.

To be in a Volvo meant riding in a warm, protective cocoon, staid but reliable for you and your family. Cool and exciting, it wasn’t.

Polestar, Volvo’s new electric-vehicle luxury spinoff division, wants to rid the world of that boring bit. The company hopes to appeal to buyers who value Volvo’s sparse, classic Scandinavian design but want a Viking-in-sheep’s-clothing attitude.

“Both Volvo and Polestar are Scandinavian, and we share values,” said Thomas Ingenlath, Polestar’s chief executive. “But we’re sportier, with a performance element. Volvo would never aim for the driver experience as the focus. They would say, ‘No, we shouldn’t do that.’”

The all-electric Polestar 2 is available from the company’s first four dealerships in Los Angeles, New York and San Francisco. An additional seven shops are expected by mid-2021, which should put 85 percent of buyers who have reserved a Polestar 2 within 150 miles of one.

ImageThe Polestar 2 uses the Google Android Automotive System for its infotainment, system operations and navigation.

The new model joins the $155,000 limited-run Polestar 1 hybrid as the group’s first volume vehicle. The Polestar 3, an electric S.U.V. based on the platform used for Volvo’s XC90, is under development with no announced sale date. The company also recently announced that it would develop and produce an additional sedan, the Precept. Its interior will be constructed from such materials as recycled PET bottles, reclaimed fishing nets and recycled cork vinyl.

Polestar, which along with its parent is owned by the Chinese manufacturer Geely, joins a host of other brands from Europe and Japan that aim luxury vehicles at those who find the companies’ main offerings boring.

But Polestar claims — unlike Volkswagen’s Audi, Nissan’s Infiniti and Toyota’s Lexus brands — that it is working to be more adventurous. “We’ll have elements of joy and surprise unthinkable in the German context,” Mr. Ingenlath said.

Polestar shuns the traditional cues that buyers see as defining a luxury vehicle. No glossy wood-grain interiors, nor lots of chrome or infinite color variations. Instead, much of the interior, including the seats and steering wheel, is clad in a fiber made solely from vegan materials and inspired by the look and feel of wet suits. When wood is used, it’s reclaimed material. The vehicle can be ordered in one of only five colors.

“We’ll have no cheesy chrome letters on our car,” Mr. Ingenlath said. There are decals on the doors instead.


The company is steering buyers away from leather seating — though it is available as a $4,000 option — because it wants customers to be aware of how that leather was created, how the animal lived and died. “You should not expect leather to be standard,” Mr. Ingenlath said.

Design cues peg the vehicle in the Volvo cinematic universe. Both marques share the T-shaped “Thor’s Hammer” headlights. The Polestar’s taillamp strip looks like a horizontal derivative of the Volvo XC40. And the overall exterior shape echoes its parent company’s sedans.

To sell its vehicles, Polestar is taking a page from Tesla and Apple, forgoing dealer showrooms in favor of what it calls Spaces — environments free of sales staff that allow customers to inspect the vehicles without someone breathing down their neck. To increase the perception that a Polestar is a work of art and not just a commodity, parts such as wheels and electric motors are even displayed in museum-like cases.

Polestar’s software, like Tesla’s, can be upgraded over the air to add new features. Unlike Tesla, Polestar won’t feature “fart mode.” “We’ll embrace elements that add fun to your life, but in our own way,” Mr. Ingenlath said.

Future tech could include video streaming when the vehicle is stopped; eye tracking to detect health or wakefulness, with solutions to stay alert; and interior climate preconditioning based on a knowledge of the driver’s habits and driving schedule.

While other manufacturers are playing up a similar future, the Polestar 2 is the first vehicle to exclusively employ the Google Android Automotive System as the brains behind its infotainment, system operations and navigation. Using the center-mounted touch screen, drivers can call up familiar Google tasks and download over 200 Android apps, including ones for AM and SiriusXM radio stations.

The Google smartphone app prompts the vehicle to recognize the driver so it can automatically adjust the seat position and show that person’s preferred touch-screen apps on the display.

With a few days behind the wheel, I found the Polestar’s driving characteristics to really shine. As with most pure-electric vehicles, acceleration is breathtaking — 0 to 62 miles per hour in 4.7 seconds, faster than a 2020 BMW 840i Gran Coupe M-Sport. Seating is supportive, and the vehicle can easily take tight turns at much higher than posted speeds, with no tire squeal or loss of traction.

The Polestar’s rapid acceleration came in handy while driving down a winding almost-empty lane in the Malibou Lake area in the Santa Monica mountains. Coming upon a driver traveling at half the speed limit, I was able to overtake her on a curve that had little forward visibility, something I never would have tried even in my own internal-combustion “sports sedan.”

The cabin is spacious, and the trunk big enough to fit a large swivel office chair once the rear seats were folded down.

The Launch Edition starts at $61,200, including delivery; a potential $7,500 federal tax credit would reduce the cost to $53,700. For this and all E.V.s, a Level 2 home charging station is a must; with it, charging to 80 percent of its Environmental Protection Agency-rated 275-mile range will take about eight hours.

As with every electric vehicle I’ve tested, that range is optimistic. After I drove 55 miles in a mix of city and freeway traffic, my range had dropped by 70 miles.

Those who opt for the $5,000 performance package get Öhlins dual flow valve dampers, Brembo front brakes, 20-inch wheels and what some may find to be gaudy gold seatbelts.


A glass roof traveling the length of the interior is standard in the Launch Edition. There’s no sun shade, as the glass filters out 99.5 percent of ultraviolet light, according to the company. Still, I found having the bright sun always shining on my head to be an annoyance, and with Southern California typically devoid of clouds, that feature would be a deal-breaker for me.

On the other hand, what may be a deal-clincher for some is the vehicle’s understated yet attractive design, one that garnered much attention over a weekend’s driving. My test vehicle was noticed multiple times, including by several people who flagged me down to discuss the car. I received more attention in the Polestar in two days than I did after a week’s worth of driving an Aston Martin DB9 and a Lamborghini Huracán.

Perhaps that’s because in Los Angeles, even high school students drive Range Rovers and Maseratis. But with just a few thousand available this year, the Polestar looks as if it will stand out for some time to come.


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Help! My Travel Agency Shut Down and I’m Out $2,000



Earlier this year, I used STA Travel to book a British Airways flight from Tucson, Ariz., to South Africa, scheduled to depart in March. Then the pandemic hit, one of the flight legs was canceled and I canceled my trip. After some back and forth, STA secured a refund from British Airways. I was told by an STA representative that my airfare — $2,059.36 — would be credited back to my credit card account within 60 days. Two months came and went. Then I learned that STA had gone out of business. Kaitlin

When I first read your email, I was hit with an inkling of hope that your credit card company could rush in and save the day. Still, I set off to learn more about the laws and policies at play, so I did usually do when I start a Tripped Up column: I emailed some industry sources and started a Google Doc to organize my thoughts.

The notes became a rabbit hole, expanding with news coverage of STA’s collapse, a list of potential interview subjects, email addresses for international press offices and lengthy financial documents. From the chicken scratch, one truth emerged: Anyone attempting to recoup funds from an out-of-business company will likely confront uphill battles, tall orders and every other cliché in the book.

“In general, when a company goes into bankruptcy, basically it’s the vultures picking over the bones,” said Ira Rheingold, the executive director of the National Association of Consumer Advocates, a Washington, D.C.-based nonprofit. “The last people who will get a piece of those bones are going to be the unsecured creditors: the consumers.”

Formerly a major travel agency for youth and student trips, STA Travel filed for bankruptcy in August after a crippling flurry of pandemic-related cancellations; it was the first major travel agency to fall because of the pandemic. Although STA’s Instagram account has been dormant for more than two months, the comments live on as a record of unanswered questions and in-limbo refunds: “I have a student that is needing an update on her refund status and there is literally no way to reach anyone,” wrote one user. “I wonder how many people got robbed of their hard-saved holiday money,” lamented another.

From the start, your case felt like a maze of sharp corners and dead ends. First I visited the STA Travel website: shut down. Then I emailed the customer service agent you had corresponded with: bounceback. When I reached out to the press office of Diethelm Keller Group, STA’s former parent company that is based in Switzerland, and I got the following statement back: “As STA Travel Holding AG is in insolvency proceedings, Diethelm Keller Group is not in a position to provide further support or information.”

I contacted the Arizona Attorney General’s office after discovering one address for STA in Arizona — possibly a franchise — but was told by a spokeswoman that all consumer complaints are confidential.

I considered calling British Airways, but decided against it; after all, the airline had already canceled your tickets and refunded your money (to STA). Customers hoping to cancel active reservations might have luck by appealing directly to the travel company in question, but anyone waiting for an in-process refund from an intermediary like STA probably would not.

I also thought about what would happen if you were to file a complaint with the Department of Transportation’s Office of Aviation Consumer Protection, but decided that the particulars of your situation would almost certainly translate into more wasted time. There are simply too many layers of gray areas: Only one of your flight legs was canceled by the airline, you purchased tickets from a third-party seller and your refund had already ostensibly been approved.

Travel insurance wouldn’t have necessarily been a magic bullet, either, said Jennifer Fitzgerald, the co-founder and chief executive of Policygenius, an online insurance marketplace. Even when policies do cover the financial default of a travel supplier, they come with loads of caveats, restrictions and conditions.

“Not every travel insurance policy includes financial default protection, and not every provider will be covered,” said Ms. Fitzgerald. “For example, third-party sellers, like travel agencies, will tend not to qualify as travel suppliers, so travel insurance financial default protection won’t cover them.”

I got about 10 pages into a 90-page bankruptcy document outlining the liquidity ratio of STA’s New Zealand arm before (to use another cliché) going back to square one: the credit card company.

Some credit cards include financial insolvency protection (designed to help cardholders when a travel merchant goes bankrupt) in trip cancellation insurance. Others, including the Chase Sapphire Reserve card you used, exclude financial insolvency protection from insurance, handling it through standard disputes channels instead.

In an emailed statement, a spokeswoman for JPMorgan Chase said, “A cardmember can submit a dispute as a result of merchant financial insolvency, which we review on a case-by-case basis.”

The Fair Credit Billing Act, a federal law enacted to protect consumers from unfair credit billing practices, doesn’t have a specific carve-out for a merchant’s financial insolvency, but it does consider “charges for goods and services you didn’t accept or that weren’t delivered as agreed” one of several types of billing errors that consumers have the right to dispute. And although every credit card dispute hinges on the particulars, this is the easiest, most actionable move for lone consumers battling a company that has all but evaporated.

You might wonder, as I did, whether things are more complicated because you’re an American citizen trying to get a refund from an insolvent Swiss company for a canceled British flight. But so long as the consumer’s account with the credit card issuer (a bank, most likely) is based in the United States, and credit is issued to a United States resident, the transaction is covered by the billing error rules of the F.C.B.A.

To protect your rights under the F.C.B.A. in the Before Times, you would have had 60 days from the statement with the billing error to dispute the charge. But these times are hardly normal. That’s why a representative at JPMorgan Chase — citing “your atypical situation with this merchant” — issued you a full refund.

My quest unearthed other tips: Even if you’re filing a dispute through a credit card’s online channels, be sure to also submit the dispute in writing, via snail-mail, to the address the card issuer specifies for billing errors (a condition of the F.C.B.A.). The Federal Trade Commission has a good sample letter online. If you’re not making headway, file a complaint with the Consumer Financial Protection Bureau, which has jurisdiction over the country’s largest banks.

One final word of advice — and one final cliché — from Mr. Rheingold: “It’s about the squeaky wheel, right? Putting something out on social media: ‘Can you believe what this company did to me?’ Or saying, ‘I’ve been a cardmember for the last 20 years and I’m getting rid of it from now.’ That’s not legal advice — that’s just practical. That’s when you get your money back.”

Sarah Firshein is a Brooklyn-based writer. If you need advice about a best-laid travel plan that went awry, send an email to travel@nytimes.com.

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