It's Inauguration Eve, and Wall Street is feeling good
Posted January 19, 2021 8:01 p.m. EST
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Today in business news: Stocks are having a post-election rager, Janet Yellen testifies on Capitol Hill, and Bed Bath & Beyond drops MyPillow. Let's get into it.
THE BIDEN BUMP
It's Inauguration Eve, and Wall Street — true to form — is feeling good.
Stocks have gained about 13% since Election Day. That's the best post-election market performance for a new president in modern history, my colleague Paul La Monica writes.
The market also cheered Donald Trump's win in 2016, rising 6% from the election to the inauguration. But there's one major difference: Trump was inheriting an economy that was growing at a stable rate during the long, post-Great Recession recovery. Biden is walking into the Covid-19 economy.
WHY ALL THE FUSS?
It might seem incongruous to have such a happy stock market during such a dark time. Coronavirus deaths just passed 400,000 in the United States. Millions of people are unemployed or have dropped out of the workforce entirely. Thousands of National Guard troops are patrolling DC to prevent extremist violence.
In short: Investors are taking the long view. Vaccine distribution, while bumpy, is underway, fueling hopes for a return to "normal" sometime this year. Increased stimulus under the Biden administration should bolster the economy, which will help improve corporate earnings — which, in the end, is the main thing investors care about.
An incredible thing happened in the Senate today: Janet Yellen, Joe Biden's pick for Treasury secretary, testified before the Senate Finance Committee on Capitol Hill. And it was boring.
I mean that in the best possible way. This was a substantive, policy-heavy snooze-fest -- a very different vibe from the partisan grandstanding and squabbling we've seen in other hearings in recent years.
During her confirmation hearing, lawmakers asked thoughtful questions and received nuanced answers about plans for a federal stimulus package, the national debt, global trade and taxes. The decibel levels in the room hovered somewhere between "sober country club luncheon" and "elderly crowd at a golf tournament."
Key takeaways from her testimony:
Yellen is urging Congress to "act big" on stimulus spending, especially while interest rates are at historically low levels.The Treasury should focus its relief spending on those who need it most: American workers, especially women and people of color, who've been hit hardest.She sees the role as having a "dual mission:" first, it's to get Americans through the pandemic, and then, longer term, to rebuild the economy.
Yellen is practically a shoo-in. Her credentials are impeccable — she previously ran the Federal Reserve and the White House Council of Economic Advisers, and she has a Ph.D in economics from Yale.
A+ recommendations: Her list of references includes, well, every living former secretary of the Treasury. From both parties.
"It is hard to imagine a better prepared nominee to meet this great moment of need than Dr. Yellen," the former officials wrote in a letter released this morning.
ETA: Democrats are pushing to confirm her as soon as Thursday.
QUOTE OF THE DAY
"We all find ourselves in the midst of concurrent health, economic and racial equity crises as well as facing the reality of an electorate divided in large part to the fiction of a fraudulent election."
-- Walmart CEO Doug McMillon
At an event hosted by the Business Roundtable, Doug McMillon lamented that the baseless claims of a stolen election, pushed by President Trump and his allies, have further inflamed the United States in a time of peril.
The reckoning has finally come for MyPillow.
Bed Bath & Beyond confirmed it has stopped selling the poorly reviewed pillow and related products after the company's CEO supported the January 6 insurrection and made false claims about the validity of the presidential election.
MyPillow CEO Mike Lindell, one of Trump's holdout supporters in Corporate America, said in an interview with a right-wing broadcaster that retailers are "scared" and blamed "leftist groups" for pressuring the vendors to dropping his product. He said that Wayfair, Kohl's and HEB also stopped selling MyPillow products. The three companies didn't respond to CNN Business' requests for comment.
Lindel was also spotted at the White House last Friday with pages of notes that appear to outline a series of recommendations including installing a Trump loyalist as the acting CIA director.
WHAT ELSE IS GOING ON
Netflix announced a milestone Tuesday: It now has more than 200 million subscribers globally after adding 8.5 million subscribers in Q4. Remember when they just mailed out DVDs?Parler was turned down by at least six different web hosting providers after Amazon dropped it, according to a court filing.Aldi and Trader Joe's join the list of large US chains paying workers to get the Covid-19 vaccine.Microsoft has joined in a $2 billion investment in Cruise, the self-driving car company mostly owned by GM.