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What Did the Trump-Biden Debate Mean for Business?

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What to make of last night’s chaotic presidential debate? The Times’s Jonathan Martin and Alexander Burns called it an “ugly melee,” CNN’s Jake Tapper dubbed it “a hot mess inside a dumpster fire inside a train wreck” and The Washington Post’s Dan Balz described it as “an insult to the public.” But in between the shouting, the invective and the trampling of the debate moderator — one transcript noted 73 instances of “[crosstalk]” — there was some discussion of issues that matter to business.

The highlights (if you can call them that):

The Affordable Care Act: President Trump disputed Joe Biden’s claim that 100 million people with pre-existing conditions might lose their health care if the law is overturned, before falsely claiming that as president he has promoted a comprehensive replacement for Obamacare. Mr. Trump also accused Mr. Biden of “going to socialist medicine,” which Mr. Biden forcefully denied.

The economy: Mr. Trump took credit for spurring job creation amid the pandemic: “We had 10.4 million people in a four-month period that we’ve put back into the work force.” Mr. Biden criticized the president’s handling of the coronavirus and said Mr. Trump would be “the only president in modern history to leave office with fewer jobs than when he took office.”

Taxes: Mr. Trump disputed The Times’s reporting on his tax returns: “I paid millions of dollars in taxes, millions of dollars of income tax.” Mr. Biden said that the president’s policies had disproportionately helped the wealthy — “Billionaires have made another $300 billion because of his profligate tax proposal” — and that average Americans paid far more in taxes than the $750 that Mr. Trump paid in both 2016 and 2017.

The main takeaway is that the debate didn’t alter the race. UBS’s Paul Donovan wrote in a note to clients today that, if anything, “the debate may have increased expectations for a contested election result,” particularly as Mr. Trump again suggested that he would challenge an unfavorable outcome. Political betting markets also showed little change, maintaining odds implying Mr. Biden is still the favorite to (eventually) win.

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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.

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ImageNo longer the “happiest place on Earth.”
Credit…David Mcnew/Agence France-Presse — Getty Images

Disney is laying off 28,000 employees. The job cuts account for around a quarter of workers at its theme parks in California and Florida, who had been on furlough. Disneyland in California remains closed, while customers have been reluctant to return to Disney World in Florida, which reopened on a limited basis in July.

Internal documents point to a “mounting injury crisis” at Amazon. Records obtained by The Reveal purport to show a growing number of workers being hurt at the company’s warehouses from 2016 to 2019. The injuries are “especially acute” during peak periods like Prime Day, according to the report. Separately, Target and Walmart announced their own mid-October sales events that coincide with Prime Day.

JPMorgan Chase will pay $920 million to settle “spoofing” trading accusations. The bank admitted wrongdoing by 15 of its traders who sought to manipulate markets for precious metals and Treasury securities. The Justice Department said the scheme cost other traders more than $300 million in losses.

New York City elementary schools reopened for in-person teaching. About 300,000 schoolchildren returned yesterday, the most of any U.S. school district. The move was hailed as a way to help get parents back to work, but hours after reopening Mayor Bill de Blasio warned that the city’s daily rate of positive Covid-19 tests had climbed above 3 percent, potentially leading to another shutdown.

The N.F.L. suffered its first Covid-19 team outbreak. At least nine members of the Tennessee Titans organization, including three players, tested positive for the coronavirus. Experts said that this was inevitable, given the lack of a “bubble” system and the full-contact nature of football. The Titans have put off practice until the extent of the outbreak is known, potentially upending this weekend’s game schedule (and giving gamblers something new to factor into their wagers).

Credit…Arnd Wiegmann/Reuters

Palantir and Asana will both begin trading today on the New York Stock Exchange via direct listings, in which no money is raised via selling shares in advance. The deals are only the third and fourth high-profile direct listings in years, following Spotify and Slack. Given the rarity of such deals and the size of the companies going to market, the listings will likely serve as a barometer for whether more could follow suit.

The details: Asana, expected to settle at a valuation of about $5 billion, is a workplace software company started by the Facebook co-founder Dustin Moskovitz. Palantir, which could be valued at more than $20 billion, is a software company used by government agencies. It was co-founded by Peter Thiel, who remains the largest individual shareholder and will wield inordinate control over the company once it goes public.

How to measure success: The initial success of any public offering is judged partly on where it prices. Does it earn a valuation higher in the public market than it did from private investors? Does it trade up (but not too far up) after listing? Pricing in direct listings is trickier than in the traditional I.P.O. process, because there is no book-building process in which bankers negotiate and allot shares to institutional investors beforehand. As such, the process is largely in the hands of market makers (Citadel, for both Asana and Palantir).

The listings could steal glory from other ways of going public. Companies going public increasingly consider a three-track process, weighing traditional I.P.O.s, direct listings and SPACs. SPACs are dilutive but also offer fresh cash, whereas direct listings do not (though that may soon change). Traditional I.P.O.s also raise cash, and may be a better fit for companies that lack brand recognition and need help telling their story to investors but are criticized for steep fees and a tendency to underprice shares to produce a first-day “pop.” A smooth, well-received performance for Asana and Palantir today may help tip the scale in direct listings’ direction.

The powerful business lobbying group’s top political strategist, Scott Reed, resigned over what he called a drift to the political left. The chamber disputes his account.

Mr. Reed said he had left because of a string of endorsements of Democrats and what he characterized as a lack of commitment to defend Republicans’ majority in the Senate. Mr. Reed is a longtime Republican operative who managed Bob Dole’s 1996 presidential campaign and was credited with helping oust Representative Steve King of Iowa over his hard-line views on immigration.

The chamber said he had been fired for improper conduct, including breaching confidentiality and leaking to news outlets. The group noted that it has endorsed 192 House Republicans, versus 30 Democrats, and it supports President Trump’s nomination of Judge Amy Coney Barrett to the Supreme Court.

The dispute highlights the minefield of political endorsements. Bruce Mehlman, a partner at the bipartisan Washington lobbying group Mehlman Castagnetti, told DealBook that his corporate clients increasingly faced questions about which candidates and issues to endorse, and it’s “definitely accelerating.” The hyperpartisan atmosphere affects perceptions of brand values and company culture, which can be fraught for executives trying to balance competing views.

Credit…Charlie Riedel/Associated Press

By the end of today, U.S. lawmakers must decide whether to extend a $25 billion grant program offered to airlines to keep employees on the payroll. And airlines must decide whether they want to tap a $25 billion loan program to cover general costs.

Seven carriers have said they will take up the loans before the deadline — including American and United, but not Delta or Southwest. All have pushed for an extension of payroll grants, and warned of tens of thousands layoffs without an agreement.

Three ways this might play out:

1) Congress strikes a deal. House Democrats rolled out a $2.2 trillion stimulus bill on Monday that included aid to airline workers. Speaker Nancy Pelosi said she was hopeful about a deal with Republicans after a 50-minute call with Treasury Secretary Steven Mnuchin on Tuesday. The two plan to resume talks today. Even an agreement in principle may be enough to stave off airline layoffs, as the companies expect a bill to make its way to the president’s desk before too long.

• If talks over a comprehensive coronavirus relief package falter, lawmakers could also pass a stand-alone bill for airlines. Yet executives would prefer not to be placed in the spotlight: The industry, which has binged on buybacks, is facing heat for receiving aid while others, like retail and hospitality, suffer under the pressure of the pandemic.

2) President Trump acts on his own. The administration has spoken on and off about offering aid to airlines through an executive order. From a political standpoint, it could be framed as a job-saving “win” for Mr. Trump, but the logistics of such a maneuver remain unclear. “We think the better plan is to get legislation passed,” Doug Parker, American Airlines’ C.E.O., recently said.

3) The aid expires with no sign of more money. This is when airlines’ dire warnings will be revealed as either negotiating tactics or founded in reality. Some, like United and Delta, have mitigated layoffs through voluntary buyouts. Others, like American, haven’t been able to strike such deals. Industry experts say that without more aid, the biggest airlines are likely to survive for at least the short term. Regional airlines, though, may face bankruptcy and even liquidation. And troubles for carriers would be likely to ripple broadly, hitting suppliers, service providers and more.

Credit…Samuel Corum/Agence France-Presse — Getty Images

More than 8,100 blazes have burned nearly four million acres across California this year. The Glass Fire that broke out this week near Napa, which is only 2 percent contained, is ravaging parts of the famous winemaking region in the middle of the harvest season, and the effects may linger long after the fires are extinguished.

Grapes untouched by flames can be tarnished by ash or smoke taint, and the extent of the damage is revealed only in the fermentation process. Since red wines are fermented along with their skins, which bear the brunt of smoke taint, they are more affected than whites. How bad is the taint? There is a testing backlog, Gladys Horiuchi of the lobbying group Wine Institute told DealBook, so the economic effects aren’t yet known.

Most California wine grapes are sold in advance, leaving only 20 percent on the market for harvest bidding. Vineyards and wineries are working together to mitigate the impact of the fires, Ms. Horiuchi said, and the goal is to avoid any smoke-tainted wine ever going on sale. That means drinkers may not notice any difference while, behind the scenes, supply chains and longstanding industry relationships come under severe pressure.

• Reports suggest that some wineries are offering growers reduced payments to keep them in business but avoid potentially tainted grapes, while major buyers like Constellation warn that contracts could be voided for elevated taint. Others are turning to the bulk market, which is usually quiet over the harvest, to cover the shortfall.

Assessing the immediate damage: The San Francisco Chronicle is keeping a running list of wineries and vineyards in Napa that have been hit by the Glass Fire, with extensive damage reported at Castello di Amorosa (although its famous castle survived), Chateau Boswell and LVMH-owned Newton Vineyard, among others.

Deals

• What pandemic? Blockbuster deals made for the busiest summer for M.&A. activity in three decades. (FT)

• NTT’s $40 billion deal for its wireless affiliate has revived speculation about another take-private possibility in Japan: SoftBank. (Bloomberg)

SPAC corner

• Joanna Coles, the former editor of Hearst magazines, is leading a blank-check company that seeks to raise $300 million for acquisitions. (Reuters)

• A blank-check company focused on green-energy targets, led by a former C.E.O. of NRG Energy, raised $200 million from investors. (BusinessWire)

Politics and policy

• The Treasury Department plans to start forgiving Paycheck Protection Loans soon, after complaints from borrowers. (WSJ)

• The Justice Department’s antitrust chief, Makan Delrahim, said he planned to scrutinize the prices that exchanges charge for trading data. (Bloomberg)

Tech

• Seattle’s City Council approved a minimum pay rate for Uber and Lyft drivers, the second city in the U.S. to do so. (NYT)

• The E.U. is prepared to clear Google’s $2.1 billion takeover of the fitness device maker Fitbit after the tech giant pledged not to use Fitbit user data to target ads for 10 years. (FT)

Best of the rest

• Blackstone plans to cut carbon emissions of companies or assets that it buys by 15 percent within three years of acquiring them. (WSJ)

• Students said that software that watches them take tests “feels like an invasion of privacy.” (NYT)

• Thanks, Obama: The Booker Prize award ceremony was rescheduled to avoid conflicting with the publication of the former president’s new memoir. (NYT)

Thanks for reading! We’ll see you tomorrow.

We’d love your feedback. Please email thoughts and suggestions to dealbook@nytimes.com.

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The Trump campaign celebrated a growth record that Democrats downplayed.

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The White House celebrated economic growth numbers for the third quarter released on Thursday, even as Joseph R. Biden Jr.’s presidential campaign sought to throw cold water on the report — the last major data release leading up to the Nov. 3 election — and warned that the economic recovery was losing steam.

The economy grew at a record pace last quarter, but the upswing was a partial bounce-back after an enormous decline and left the economy smaller than it was before the pandemic. The White House took no notice of those glum caveats.

“This record economic growth is absolute validation of President Trump’s policies, which create jobs and opportunities for Americans in every corner of the country,” Mr. Trump’s re-election campaign said in a statement, highlighting a rebound of 33.1 percent at an annualized rate. Mr. Trump heralded the data on Twitter, posting that he was “so glad” that the number had come out before Election Day.

The annualized rate that the White House emphasized extrapolates growth numbers as if the current pace held up for a year, and risks overstating big swings. Because the economy’s growth has been so volatile amid the pandemic, economists have urged focusing on quarterly numbers.

Those showed a 7.4 percent gain in the third quarter. That rebound, by far the biggest since reliable statistics began after World War II, still leaves the economy short of its pre-pandemic levels. The pace of recovery has also slowed, and now coronavirus cases are rising again across much of the United States, raising the prospect of further pullback.

“The recovery is stalling out, thanks to Trump’s refusal to have a serious plan to deal with Covid or to pass a new economic relief plan for workers, small businesses and communities,” Mr. Biden’s campaign said in a release ahead of Thursday’s report. The rebound was widely expected, and the campaign characterized it as “a partial return from a catastrophic hit.”

Economists have warned that the recovery could face serious roadblocks ahead. Temporary measures meant to shore up households and businesses — including unemployment insurance supplements and forgivable loans — have run dry. Swaths of the service sector remain shut down as the virus continues to spread, and job losses that were temporary are increasingly turning permanent.

“With coronavirus infections hitting a record high in recent days and any additional fiscal stimulus unlikely to arrive until, at the earliest, the start of next year, further progress will be much slower,” Paul Ashworth, chief United States economist at Capital Economics, wrote in a note following the report.

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Black and Hispanic workers, especially women, lag in the U.S. economic recovery.

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The surge in economic output in the third quarter set a record, but the recovery isn’t reaching everyone.

Economists have long warned that aggregate statistics like gross domestic product can obscure important differences beneath the surface. In the aftermath of the last recession, for example, G.D.P. returned to its previous level in early 2011, even as poverty rates remained high and the unemployment rate for Black Americans was above 15 percent.

Aggregate statistics could be even more misleading during the current crisis. The job losses in the initial months of the pandemic disproportionately struck low-wage service workers, many of them Black and Hispanic women. Service-sector jobs have been slow to return, while school closings are keeping many parents, especially mothers, from returning to work. Nearly half a million Hispanic women have left the labor force over the last three months.

“If we’re thinking that the economy is recovering completely and uniformly, that is simply not the case,” said Michelle Holder, an economist at John Jay College in New York. “This rebound is unevenly distributed along racial and gender lines.”

The G.D.P. report released Thursday doesn’t break down the data by race, sex or income. But other sources make the disparities clear. A pair of studies by researchers at the Urban Institute released this week found that Black and Hispanic adults were more likely to have lost jobs or income since March, and were twice as likely as white adults to experience food insecurity in September.

The financial impact of the pandemic hit many of the families that were least able to afford it, even as white-collar workers were largely spared, said Michael Karpman, an Urban Institute researcher and one of the studies’ authors.

“A lot of people who were already in a precarious position before the pandemic are now in worse shape, whereas people who were better off have generally been faring better financially,” he said.

Federal relief programs, such as expanded unemployment benefits, helped offset the damage for many families in the first months of the pandemic. But those programs have mostly ended, and talks to revive them have stalled in Washington. With virus cases surging in much of the country, Mr. Karpman warned, the economic toll could increase.

“There could be a lot more hardship coming up this winter if there’s not more relief from Congress, with the impact falling disproportionately on Black and Hispanic workers and their families,” he said.

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Ant Challenged Beijing and Prospered. Now It Toes the Line.

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As Jack Ma of Alibaba helped turn China into the world’s biggest e-commerce market over the past two decades, he was also vowing to pull off a more audacious transformation.

“If the banks don’t change, we’ll change the banks,” he said in 2008, decrying how hard it was for small businesses in China to borrow from government-run lenders.

“The financial industry needs disrupters,” he told People’s Daily, the official Communist Party newspaper, a few years later. His goal, he said, was to make banks and other state-owned enterprises “feel unwell.”

The scope of Mr. Ma’s success is becoming clearer. The vehicle for his financial-technology ambitions, an Alibaba spinoff called Ant Group, is preparing for the largest initial public offering on record. Ant is set to raise $34 billion by selling its shares to the public in Hong Kong and Shanghai, according to stock exchange documents released on Monday. After the listing, Ant would be worth around $310 billion, much more than many global banks.

The company is going public not as a scrappy upstart, but as a leviathan deeply dependent on the good will of the government Mr. Ma once relished prodding.

More than 730 million people use Ant’s Alipay app every month to pay for lunch, invest their savings and shop on credit. Yet Alipay’s size and importance have made it an inevitable target for China’s regulators, which have already brought its business to heel in certain areas.

These days, Ant talks mostly about creating partnerships with big banks, not disrupting or supplanting them. Several government-owned funds and institutions are Ant shareholders and stand to profit handsomely from the public offering.

The question now is how much higher Ant can fly without provoking the Chinese authorities into clipping its wings further.

Excitable investors see Ant as a buzzy internet innovator. The risk is that it becomes more like a heavily regulated “financial digital utility,” said Fraser Howie, the co-author of “Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise.”

“Utility stocks, as far as I remember, were not the ones to be seen as the most exciting,” Mr. Howie said.

Ant declined to comment, citing the quiet period demanded by regulators before its share sale.

The company has played give-and-take with Beijing for years. As smartphone payments became ubiquitous in China, Ant found itself managing huge piles of money in Alipay users’ virtual wallets. The central bank made it park those funds in special accounts where they would earn minimal interest.

After people piled into an easy-to-use investment fund inside Alipay, the government forced the fund to shed risk and lower returns. Regulators curbed a plan to use Alipay data as the basis for a credit-scoring system akin to Americans’ FICO scores.

China’s Supreme Court this summer capped interest rates for consumer loans, though it was unclear how the ceiling would apply to Ant. The central bank is preparing a new virtual currency that could compete against Alipay and another digital wallet, the messaging app WeChat, as an everyday payment tool.

Ant has learned ways of keeping the authorities on its side. Mr. Ma once boasted at the World Economic Forum in Davos, Switzerland, about never taking money from the Chinese government. Today, funds associated with China’s social security system, its sovereign wealth fund, a state-owned life insurance company and the national postal carrier hold stakes in Ant. The I.P.O. is likely to increase the value of their holdings considerably.

“That’s how the state gets its payoff,” Mr. Howie said. With Ant, he said, “the line between state-owned enterprise and private enterprise is highly, highly blurred.”

China, in less than two generations, went from having a state-planned financial system to being at the global vanguard of internet finance, with trillions of dollars in transactions being made on mobile devices each year. Alipay had a lot to do with it.

Alibaba created the service in the early 2000s to hold payments for online purchases in escrow. Its broader usefulness quickly became clear in a country that mostly missed out on the credit card era. Features were added and users piled in. It became impossible for regulators and banks not to see the app as a threat.

ImageAnt Group’s headquarters in Hangzhou, China.
Credit…Alex Plavevski/EPA, via Shutterstock

A big test came when Ant began making an offer to Alipay users: Park your money in a section of the app called Yu’ebao, which means “leftover treasure,” and we will pay you more than the low rates fixed by the government at banks.

People could invest as much or as little as they wanted, making them feel like they were putting their pocket change to use. Yu’ebao was a hit, becoming one of the world’s largest money market funds.

The banks were terrified. One commentator for a state broadcaster called the fund a “vampire” and a “parasite.”

Still, “all the main regulators remained unanimous in saying that this was a positive thing for the Chinese financial system,” said Martin Chorzempa, a research fellow at the Peterson Institute for International Economics in Washington.

“If you can’t actually reform the banks,” Mr. Chorzempa said, “you can inject more competition.”

But then came worries about shadowy, unregulated corners of finance and the dangers they posed to the wider economy. Today, Chinese regulators are tightening supervision of financial holding companies, Ant included. Beijing has kept close watch on the financial instruments that small lenders create out of their consumer loans and sell to investors. Such securities help Ant fund some of its lending. But they also amplify the blowup if too many of those loans aren’t repaid.

“Those kinds of derivative products are something the government is really concerned about,” said Tian X. Hou, founder of the research firm TH Data Capital. Given Ant’s size, she said, “the government should be concerned.”

The broader worry for China is about growing levels of household debt. Beijing wants to cultivate a consumer economy, but excessive borrowing could eventually weigh on people’s spending power. The names of two of Alipay’s popular credit functions, Huabei and Jiebei, are jaunty invitations to spend and borrow.

Huang Ling, 22, started using Huabei when she was in high school. At the time, she didn’t qualify for a credit card. With Huabei’s help, she bought a drone, a scooter, a laptop and more.

The credit line made her feel rich. It also made her realize that if she actually wanted to be rich, she had to get busy.

“Living beyond my means forced me to work harder,” Ms. Huang said.

First, she opened a clothing shop in her hometown, Nanchang, in southeastern China. Then she started an advertising company in the inland metropolis of Chongqing. When the business needed cash, she borrowed from Jiebei.

Online shopping became a way to soothe daily anxieties, and Ms. Huang sometimes racked up thousands of dollars in Huabei bills, which only made her even more anxious. When the pandemic slammed her business, she started falling behind on her payments. That cast her into a deep depression.

Finally, early this month, with her parents’ help, she paid off her debts and closed her Huabei and Jiebei accounts. She felt “elated,” she said.

China’s recent troubles with freewheeling online loan platforms have put the government under pressure to protect ordinary borrowers.

Ant is helped by the fact that its business lines up with many of the Chinese leadership’s priorities: encouraging entrepreneurship and financial inclusion, and expanding the middle class. This year, the company helped the eastern city of Hangzhou, where it is based, set up an early version of the government’s app-based system for dictating coronavirus quarantines.

Such coziness is bound to raise hackles overseas. In Washington, Chinese tech companies that are seen as close to the government are radioactive.

In January 2017, Eric Jing, then Ant’s chief executive, said the company aimed to be serving two billion users worldwide within a decade. Shortly after, Ant announced that it was acquiring the money transfer company MoneyGram to increase its U.S. footprint. By the following January, the deal was dead, thwarted by data security concerns.

More recently, top officials in the Trump administration have discussed whether to place Ant Group on the so-called entity list, which prohibits foreign companies from purchasing American products. Officials from the State Department have suggested that an interagency committee, which also includes officials from the departments of defense, commerce and energy, review Ant for the potential entity listing, according to three people familiar with the matter.

Ant does not talk much anymore about expanding in the United States.

Ana Swanson contributed reporting.

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