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US

Lindsey Graham: We ‘folded’ on debt ceiling

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Senators – including 11 Republicans — voted to approve a short-term increase to the federal debt ceiling on Thursday night, ending a weekslong standoff on Capitol Hill. Sen Lindsey Graham, R-S.C., said Republicans dug themselves into a hole for ‘folding’ during an appearance on “Hannity” Thursday night.

SENATE VOTES TO LIFT DEBT CEILING BY $480B

Sen. Lindsey Graham: “Well, we screwed up. For two months, we promised our base and the American people that we would not help the Democratic Party raise the debt ceiling so they could spend $3.5 to $5 trillion through reconciliation. At the end of the day, we blinked. Two things have happened: We let our people down, and we made Democrats believe that we are all talk and no action. At the end of the day, every Republican voted against raising the debt ceiling, every Democratic senator voted for it. But we had a process in place. We made a promise, for two months, that we would make them do it without our help and we folded, and I hate that. We’re in a hole; we’ve got to dig out of this hole and we can. We shot ourselves in the foot tonight, but we will revisit this issue in December.”

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McConnell’s shift on debt ceiling fight puts GOP in a bind

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During a private 90-minute meeting on Thursday evening, Sen. Ted Cruz of Texas sharply disagreed with McConnell’s strategy — and insisted he would force a 60-vote threshold on the GOP leader’s plan to avoid a debt default until early December. That means 10 Republicans would be forced to break a GOP-led filibuster in order to allow the debt ceiling increase to move ahead.

A number of GOP senators, such as fellow conservative Sen. Ron Johnson of Wisconsin, made the case that the McConnell deal — while far from ideal — should be allowed to pass with just 51 votes, allowing Democrats to vote for it and Republicans to vote against it. But Cruz — along with his two allies, Sens. Mike Lee of Utah and Rand Paul of Kentucky, who were not at the meeting — showed no signs of relenting.

The divisions over strategy and policy undercut the GOP leader’s long-prized effort to maintain unity amid high-profile fights with Democrats. And it comes as Republicans are openly questioning his move, which he has privately defended as necessary to ensure that Democrats don’t take steps to weaken the Senate’s filibuster rules that give power to the minority party to scuttle the majority’s agenda.

Sen. John Kennedy of Louisiana said he was “very disappointed” by McConnell’s decision to allow Democrats to pursue a short-term debt ceiling hike under normal procedures. Cruz called the strategy a “serious mistake” and said he thinks “Democratic threats to destroy the filibuster caused him to give in.” And Sen. Lindsey Graham of South Carolina complained that “we had a plan and he threw it over.”

“Why the hell would I make it easier for them to raise the debt ceiling through regular order?” Graham added in a statement.

McConnell has defended his approach both in public settings and behind closed doors, signaling to members that the future of the Senate rules may have been at stake.

One Republican senator defended McConnell, saying that “you would have to ask McConnell more about the conversations he had with (moderate Democratic Sens.) Joe Manchin and Kyrsten Sinema. I just believe in his estimation, it is about saving the institution of the Senate.”

McConnell has also argued that helping Democrats punt the debt ceiling crisis now undermines Democrats’ argument that they don’t have enough time to use the complex budgetary process known as reconciliation to lift the nation’s borrowing limit. And McConnell also pointed out that, as part of the deal, Democrats have to name a fixed dollar amount to which to raise the debt ceiling — and they will have to own that number.

But not everyone in his conference is in agreement. And the palpable angst among Republicans is now throwing into question whether a debt-ceiling increase can quickly pass the chamber. At issue is rounding up 10 Republicans to allow the debt limit vote to proceed, though Democrats would still have to raise the ceiling on their own. GOP leaders had wanted their members to allow a quick up-or-down vote, but some Republicans had signaled they would object in order to force the 60-vote threshold.

Emerging from the closed-door, 90-minute meeting Thursday evening, GOP senators said it’s still unclear if there will be 10 senators to break a filibuster on the short-term debt ceiling hike. The procedural vote is scheduled for later Thursday evening.

“There are disagreements within the conference, which is not surprising,” Cruz said leaving the meeting. “Two days ago Republicans were unified. We were all on the same page. … Schumer was on the verge of surrendering. And, unfortunately, the deal that was put on the table was a lifeline for Schumer, and I disagree with that decision.”

GOP leaders continue to insist they will find a way forward.

“In the end we’ll be there, but it’s going to be a painful birthing process,” said Sen. John Thune of South Dakota, the Senate GOP whip.

Inside McConnell’s shift

McConnell for months had been warning Democrats that they will need to go it alone on a debt ceiling hike. That’s why it caught some GOP members by surprise on Wednesday when the Kentucky Republican announced that he was going to offer Democrats a short-term off ramp to the fiscal crisis.

One member described it as “whiplash,” while an aide confided that the discussion in the closed-door conference was a bit “rowdy.”

“Some think that by having this delay, it’s a sign of weakness,” said Sen. Mike Braun of Indiana. “I don’t think so.”

One reason for McConnell’s shift in thinking, according to multiple lawmakers: preserving the filibuster. With Republicans insisting that Democrats raise the debt ceiling on their own through reconciliation, and Democrats refusing to go that route, there were serious conversations inside the Democratic caucus this week about creating a carve-out to get around the filibuster in order to deal with the debt ceiling.

McConnell said during a closed-door lunch this week he was concerned about the pressure on Manchin and Sinema to change the Senate rules, according to sources, even as they showed no signs of budging.

“Let’s save the institution of the Senate, and let’s not test Joe Manchin’s resolve,” said Sen. Kevin Cramer of North Dakota, describing the thinking inside the Senate GOP.

McConnell’s reversal has reverberated beyond the Senate Republican conference.

Conservative Rep. Chip Roy of Texas, a former Cruz staffer, blasted McConnell on Twitter and accused Republicans of folding because they didn’t want to miss a fundraiser being hosted by the Senate GOP’s campaign arm next week.

And former President Donald Trump, who has made bashing McConnell a regular habit, also accused the GOP leader of caving.

“Looks like Mitch McConnell is folding to the Democrats, again,” Trump said in a statement. “He’s got all of the cards with the debt ceiling, it’s time to play the hand. Don’t let them destroy our Country!”

Other Republicans, however, came to McConnell’s defense, pointing out he was consistent in not wanting to let the nation to default on its debts and arguing Democrats will still have to address the debt ceiling — as well as government funding — in December, a messy scenario right before the holidays.

Cramer called the deal floated by McConnell an “elegant solution.” But he also acknowledged that some of his Republican colleagues didn’t share that view.

“It’s been a lot more fun to watch Democrat-on-Democrat than it is to participate in Republican-on-Republican,” Cramer said.

Jessica Dean and Ted Barrett contributed to this report.

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Business

Dow Jones Futures: Jobs Report Key For Market Rally As Leaders Flash Buy Signals; Senate OKs Debt Limit Hike

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Dow Jones futures titled higher Thursday night, along with S&P 500 futures and Nasdaq futures, with the September jobs report on tap. The stock market rally attempt had a solid Thursday, but the major indexes backed off key levels while volume declined.




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Bottom line: It remains a stock market correction. Friday could be a pivotal day, with the September jobs report due before the open.

Sea Limited (SE), Ford Motor (F), Advanced Micro Devices (AMD) and Zscaler (ZS) were among a slew of stocks flashing buy signals. SE stock, AMD stock and ZS stock broke trend lines as they rebounded from their 50-day lines. Ford stock cleared a handle that was fractionally too low to be considered an official buy point.

Investors also should keep a close eye on Microsoft stock, Nvidia (NVDA) and Google parent Alphabet (GOOGL). These three institutional-quality stocks all moved back to their 50-day lines as they work on bases. If they can push higher, that would offer early entries. If they get turned away, they could be possible shorts.

Meanwhile, Tesla (TSLA) is holding its annual shareholder meeting Thursday afternoon at its new factory near Austin, Texas. Elon Musk confirmed that there will be no Tesla Cybertruck or other new models over the next year. He also indicated that 4680 battery cells are not yet ready.

Tesla stock edged lower overnight after settling at its best close in nearly eight months.

The Tesla shareholder meeting comes as recent news from General Motors (GM), Lucid Motors (LCID), Rivian Automotive suggest they could erode Tesla’s enviable status, while Ford also is stepping up in electric vehicles. In addition to Ford, GM flashed an early entry from its 200-day line. LCID stock is working on a handle in a bottoming base.

Tesla stock is on IBD Leaderboard, along with Microsoft (MSFT), Google, AMD and Nvidia stock. AMD stock is on SwingTrader. Microsoft and Google stock are on IBD Long-Term Leaders. Google and ZS stock are on the IBD 50, which has a number of actionable names right now.

The video embedded in this article analyzed AMD stock, Zscaler and eBay (EBAY), and reviewed an interesting session.

Best Growth Stocks To Buy And Watch

Jobs Report

Economists expect the September jobs report to show a nonfarm payrolls gain of 475,000, with the jobless rate dipping to 5.1%.

Investors will want to see a pickup in hiring from August’s 235,000 jobs to show that the economic recovery is on track. But too-fast hiring could send Treasury yields sharply higher and raise expectations for a faster Fed bond taper.

Dow Jones Futures Today

Dow Jones futures were 0.2% above fair value. S&P 500 futures advanced 0.15% and Nasdaq 100 futures rose 0.2%.

The 10-year Treasury yield extended Thursday’s gains overnight, edging up to 1.59%.

The jobs report will be out at 8:30 a.m. ET. That will be sure to swing Dow futures and Treasury yields, and it could take a while before the market decides if the jobs report was bullish or bearish.

The Senate voted Thursday night to raise the debt limit into December, as Democrats went along with Senate Minority Leader Mitch McConnell’s offer for a short-term debt hike. The House must OK the measure and send it to President Joe Biden to head off a government default.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

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Stock Market Rally

The stock market rally started off strong, then backed off somewhat from intraday highs.

The Dow Jones Industrial Average rose 1% in Thursday’s stock market trading. The S&P 500 index climbed 0.8%. The Nasdaq composite advanced just over 1%. The small-cap Russell 2000 popped 1.6%

The 10-year Treasury yield gained five basis points to 1.57%, the highest point since mid-June.

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) climbed 1.1%, while the Innovator IBD Breakout Opportunities ETF (BOUT) popped 2.1%. The iShares Expanded Tech-Software Sector ETF (IGV) advanced 1.2%, with MSFT stock a major holding. The VanEck Vectors Semiconductor ETF (SMH) also added 1.2%, with Nvidia stock and AMD key components.

SPDR S&P Metals & Mining ETF (XME) rebounded 1.7% and Global X U.S. Infrastructure Development ETF (PAVE) 1.1%. U.S. Global Jets ETF (JETS) retreated 0.9%. SPDR S&P Homebuilders ETF (XHB) advanced 1.8%. The Energy Select SPDR ETF (XLE) climbed 0.8% and the Financial Select SPDR ETF (XLF) 0.6%.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) rallied 2.4% and ARK Genomics ETF (ARKG) 2.5%. Tesla stock remains the top holding across ARK Invest’s ETFs, but Cathie Wood has sold a significant share of ARK’s TSLA stock over the past month.

Five Best Chinese Stocks To Watch Now

Tesla Shareholder Meeting

The Tesla shareholder meeting kicked off at 5:30 p.m. ET.

A Tesla official said the EV maker targeted sales of 20 million vehicles in 2030. For perspective, global auto sales were 77.5 million in 2019, before the coronavirus and chip shortages of the past two years. Tesla is moving its headquarters to Austin, Texas. But CEO Elon Musk said Tesla still aims to significantly boost production at its Fremont, California, plant.

Musk said the goal is to have the Cybertruck in production starting at the end of 2022, with the Semi and Roaster coming in 2023. That’s not too different from what was already known. That means no new vehicles delivered over the next year, with no significant new markets remaining for its existing products.

Musk said production of 4680 batteries could happen at the Austin factory next year, indicating that some technical issues remain. Getting those 4680 batteries — with promised specs and cost savings — into mass production is key to making the Tesla Cybertruck, Semi and Roadster viable.

Musk tweeted earlier Thursday that Tesla will begin rolling out its FSD Beta software to Full Self-Driving owners Friday at midnight, with 1,000 per day starting with drivers who had great safety scores in a recent test. The rollout is high risk, high reward. If the FSD Beta release goes well, that could boost Tesla revenue and burnish its driver-assist credentials. But if drivers complain about the still-in-progress Level 2 system, or if a number of accidents occur, the backlash could be severe.

On Saturday, Tesla will hold an event at its unfinished factory near Berlin. CEO Elon Musk this summer made comments that suggested production could begin in October, but the factory may not open until 2022.

All this comes days after Tesla reported deliveries of 141,300 EVs in the third quarter, yet another record and beating views.

Shares lost a fraction after the Tesla shareholder meeting.

Tesla stock rose 1.4% to 793.68 on Thursday, the best close since late February. That’s still in range from a 764.55 buy point.

Tesla Rivals

Tesla is riding high, with record deliveries yet again and huge pricing power during the global automotive crunch. Likely U.S. electric vehicle credits for Tesla in the near future promise to fatten margins further.

But the competitive landscape is changing dramatically, especially in the U.S.

Rivian has begun delivering the R1T, the first of several electric pickups that will beat the Tesla Cybertruck to market. General Motors, which will release its high-end Hummer EV this year, said Wednesday that it planned to unveil a highly advanced “Ultra Cruise” driver-assistance system to customers in 2023 as it also pushes into robotaxis with its Cruise unit.

Rivian will release its R1S large SUV before year-end while the GM Lyriq is due next spring, both taking on the Tesla Model X, which has seen dwindling sales and production issues.

Lucid Motors will begin Lucid Air deliveries this month. The luxury Lucid Air sedan boasts a 520-mile range that’s far beyond even the Tesla Model S Plaid.

Not only will these specific models and offerings provide competition for Tesla — along with dozens of other EV models through 2022 — but they could erode Tesla’s public status as having the cutting edge EVs and auto technology.

Musk may feel a need to address these emerging challengers and respond to GM’s self-driving ambitions and various digs at Tesla.

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Market Rally Analysis

The stock market rally attempt took another positive step. But the indexes’ price gains ultimately were not quite strong enough while NYSE and Nasdaq volume fell from Wednesday. So the Dow Jones did not have a follow-through day confirming its rally attempt on day five. The Nasdaq and S&P 500, on day 3 of their rally attempts, will be eligible for follow-through days starting Friday.

Meanwhile, the major indexes hit resistance at key levels. The Dow Jones hit resistance around its 50-day moving average. The S&P 500 gapped above its 21-day line but then also backed off slightly from near its 50-day. The Nasdaq composite and Nasdaq 100 hit resistance at the 21-day line.

Thursday’s low-volume gains and hitting resistance suggests that big institutions are holding back on the stock market rally. That’s not surprising with the jobs report on tap. A well-received jobs report could be the trigger for a high-volume advance, but it could be a high-volume retreat as well.

From the perspective of leading stocks, the market rally is looking healthy. A number are flashing buy signals, typically rebounding from key support or breaking trend lines, but those gains could quickly reverse if the market rally attempt fizzles.

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What To Do Now

With the stock market rally attempt continuing to show positive signs, investors could choose to nibble at a few tasty buying opportunities. But if you do so, it’s probably a good idea to keep exposure relatively light and use tight stops.

There’s also nothing wrong with not taking any action until the market rally is confirmed. If the market rally has a follow-through day and goes on to have a run for several weeks or months, you will have plenty of opportunities to make money. If the rally peters out after a few days, you’ll probably be happy you stayed out.

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.

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US

What’s going on with the debt ceiling?

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The U.S. was careening toward its first-ever default in the absence of a deal to raise or suspend the nation’s debt limit, allowing the Treasury to borrow more money to pay its debts. But it appears what most agree would be a crisis in on the verge of being averted in the short term.

Treasury Secretary Janet Yellen has warned the “extraordinary” measures currently being used to pay the government’s bills are expected to be exhausted if Congress does not act by October 18, and at that point, the U.S. would run out of resources and default. It would be “catastrophic,” Yellen said Tuesday and would lead to a recession.

Democrats and Republicans in Congress were gridlocked for weeks over how to proceed. In the Senate, where 60 votes are usually required to pass a bill, Democrats and Republicans had settled on the understanding that only Democrats would vote to raise the debt limit, but since Democrats only have 50 votes, the two parties couldn’t agree on how it would be done. Republicans filibustered — or blocked — Democrats’ prior attempts before Thursday.

What’s the state of play in Congress?

The problem, President Biden and Democrats say, is that GOP lawmakers are blocking the efforts they’re making to enable a simple majority of 50 senators to pass a suspension of the debt limit. Republicans, Mr. Biden said Monday, need to “get out of the way.” 

Senate Republicans have so far refused to vote to raise or suspend the debt limit, and yet, they have already blocked several attempts by Senate Democrats to do so with a simple majority. The president prevailed on Republicans to stop obstructing Democrats’ efforts to hold the vote under regular Senate rules. 

One way to do this, which has now failed, is to get senators to agree unanimously to allow a simple majority to suspend the debt limit, rather than the 60 votes normally required to pass a bill. And the problem is that this approach means not a single Republican may object. 

A breakthrough may be close, though. Senate Minority Leader Mitch McConnell on Wednesday offered a proposal suggesting Republicans would allow Democrats to pass a short-term provision to raise the debt ceiling to a specific figure until December.

Speaking on the Senate floor around midnight, Senate Majority Leader Chuck Schumer said the two sides “have been negotiating all afternoon and all night. … We are making good progress. We’re not there yet, but I hope we can come to an agreement tomorrow morning.”

McConnell also maintained Democrats can raise the debt ceiling with the reconciliation process — without any Republican support. 

So, what are Democrats going to do next?

Earlier, the White House called it “kicking the can down the road.” Separately, Schumer is trying another avenue. Last week, the House passed a bill to suspend the debt limit, and Schumer planned to move forward with this legislation. Schumer reasoned that if 10 Republicans were to vote to allow the vote to proceed, Democrats wouldn’t need any Republicans to support raising the debt ceiling in the final vote. The vote could take place Thursday or Friday.

Is that going to work?

Probably not. It is still expected to fail. 

Isn’t there some other way to get around the filibuster?

There is what’s known as “the nuclear option,” an extreme measure that enables the majority leader to change Senate rules. It was first used by Democratic Senate Majority Leader Harry Reid to kill the filibuster, the 60-vote threshold, for any nomination other than a Supreme Court justice. During the Trump administration, GOP Senate Majority Leader Mitch McConnell invoked it again to drop the filibuster for Supreme Court justices, too.

Here’s how it works: the Senate majority leader raises a point of order that violates the current rules. The presiding officer rejects the point of order, and then the majority leader appeals the ruling and calls for a vote. A simple majority overturns the ruling of the chair, and the false statement made by the majority leader becomes the new rule. 

So, in 2013, Reid declared that “the vote on cloture under Rule XXII for all nominations other than for the Supreme Court of the United States is by majority vote.” The chair replied, “Under the rules, the point of order is not sustained.”

Reid then asked for a vote on upholding the chair’s ruling, and by a vote of 48-52, the chair’s ruling was rejected. “The threshold for cloture nominations, not including those to the Supreme Court… is now a majority,” the president pro tempore said.

On Tuesday, President Biden suggested he was open to another exception to the filibuster in order to raise the debt ceiling. “I think that’s a real possibility,” he told reporters. He has said he opposes eliminating the filibuster because it would “throw the entire Congress into chaos” and make it impossible to get anything done.

To do this, every single Senate Democrat would have to support the action. Senators Joe Manchin and Kyrsten Sinema, both moderates, have expressed opposition to ending the filibuster, and on Wednesday, Manchin rejected the idea, telling reporters, “I’ve been very, very clear where I stand on the filibuster — nothing changes.” He implored McConnell and Schumer to work together and lead.

In June, Sinema wrote in a Washington Post opinion piece, “If we eliminate the Senate’s 60-vote threshold, we will lose much more than we gain.”

Can Democrats use reconciliation to address the debt limit?

Sure, but Democrats have rejected this idea, calling it “too risky.” President Biden doesn’t like the move. It’s a lengthier, more complex way to hold the vote, but the White House said it has not been completely ruled out. 

“The reconciliation process would mean essentially starting from scratch,” White House press secretary Jen Psaki said Monday.

Bill Hoagland, of the Bipartisan Policy Center, explained that while using reconciliation to address the debt limit would involve revising the budget resolution, it would not jeopardize debate on the $3.5 trillion reconciliation package already underway. It can be considered in a separate bill.

“You could have three different reconciliation bills with all three different dates. They only combined the revenues and the spending into one reconciliation bill,” Hoagland said. “All this does is set up a separate reconciliation for a separate bill that’s only debt limit.”

To use budget reconciliation, Democrats would only be able to raise the debt limit, not suspend it. The former requires them to come up with a specific dollar amount, while the latter does not demand a specific figure. Suspending the debt limit means that it would not be operative for a specific period of time until a certain date, and when that arrives, the debt limit would automatically rise to meet the funds spent during the period of suspension. 

Hoagland estimates the full process of revising the budget resolution and moving forward with a debt limit reconciliation bill could take up to two weeks, but with the threat of default looming, he thinks it could go much more quickly. 

“If you want to work around the clock a little bit, you could do this in a week,” Hoagland said. Delay tactics could still be used, he noted, but questioned why Republicans would delay if they really want Democrats to use reconciliation to raise the debt limit. 

Did Biden vote against raising the debt limit as a senator?

With the more than $28.4 trillion national debt resulting from past actions of both parties, Democrats have been pushing for a bipartisan approach to addressing the debt limit.

In a letter to Biden on Monday, McConnell said if the Democratic Party wishes to govern alone, “it must handle the debt limit alone as well.” McConnell claimed the debt limit is often a partisan vote when the same party controls Congress and the White House. 

“In 2003, 2004, and 2006, Mr. President, you joined Senate Democrats in opposing debt limit increases and made Republicans do it ourselves,” his letter read. It stated Biden’s view at that time that the party in power should take responsibility, as the GOP insists now.

In all three years McConnell referenced, Republicans voted with little or no support from Democrats to address the debt ceiling. In 2003, the debt ceiling was addressed with 50 GOP votes and 3 Democrats in the Senate; in 2004 it was 50 GOP votes and 2 Democrats; and in 2006, it was 52 GOP votes with no Democrats according to the Tax Policy Center. 

Reporters asked the president Monday why his “no” votes in those years were different from the GOP stance now. Democrats weren’t threatening to filibuster the vote, Mr. Biden responded. Democrats never demanded that Republicans find 60 votes to raise the debt limit — as they are now. 

Hoagland, who was the staff director of the Senate Budget Committee for Republicans said that a straight up-or-down vote, the route Democrats would like to take, would be much faster and less complicated than using reconciliation to raise the debt limit.

Jack Turman and Brian Dakss contributed to this report.

Sarah Ewall-Wice

CBS News reporter covering economic policy.

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Business

Market Rallies On McConnell Debt Limit Offer; Affirm Soars, Bitcoin Tops $55,000| Investor’s Business Daily

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Dow Jones futures tilted higher Wednesday night, along with S&P 500 futures and Nasdaq futures. The major indexes rose modestly Wednesday, rebounding off sharp morning lows amid a McConnell debt-limit offer. It was a positive sign for the stock market rally attempt, but it’s still a market correction for now.




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Senate Minority Leader Mitch McConnell said Wednesday that Republicans would let Democrats pass a short-term debt-limit extension, helping to avoid a looming default that could come as soon as Oct. 18. Democratic senators signaled they would accept the offer.

Affirm Holdings (AFRM) surged yet again on Wednesday, this time on a new “buy now, pay later” partnership with Target (TGT). AFRM stock spiked, flashing multiple buy signals and hitting its highest levels since February.

After the close, Twitter (TWTR) agreed to sell its MoPub mobile ad network to AppLovin (APP) for $1.05 billion. TWTR stock rose modestly in extended trading, trying to get above its 200-day and 50-day lines. APP stock surged 9%, signaling a strong move past a handle buy point.

Software Stocks Advance

SNOW stock, Fortinet (FTNT), Palo Alto Networks (PANW), Zscaler (ZS), Salesforce.com (CRM), Microsoft (MSFT) and Bill.com (BILL) are showing strength. Software makers are relatively insulated from supply-chain woes plaguing much of the economy.

Snowflake (SNOW), Fortinet, Palo Alto and ZS stock all rebounded from or reclaimed their 50-day moving averages, while Bill.com has bounced from its 10-week line. CRM stock rallied off its 21-day moving average, on the verge of reclaiming a breakout buy point. In a stronger market, aggressive investors could take advantage of all these names.

Meanwhile, MSFT stock rose to the cusp of its 50-day line. A flat-base buy point isn’t far above that key level, according to MarketSmith analysis.

The price of Bitcoin raced higher Wednesday, topping $55,000, continuing Tuesday’s rally. Bitcoin- and crypto-related plays also rallied, including Marathon Digital (MARA), Grayscale Bitcoin Trust (GBTC) and Coindesk (COIN).

Meanwhile, energy stocks fell solidly as oil prices declined and natural gas prices tumbled, after both had soared to record highs. Financials were steady as Treasury yields reversed from multimonth highs to finish slightly lower.

Microsoft stock is on IBD Leaderboard. Fortinet stock and Microsoft are on IBD Long-Term Leaders.

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McConnell Debt Limit Offer

Senate McConnell said Republicans would let Democrats pass a two-month debt-limit extension via normal procedures. That would push off the risk of government default. Treasury Secretary Janet Yellen has suggested that Oct. 18 is the deadline, though other reports suggest the Treasury might be able to avoid a destabilizing default until early November.

McConnell’s offer came as Senate Majority Leader Chuck Schumer was poised to try yet again to push through a longer-term debt-limit hike, despite certain GOP opposition. Meanwhile, President Joe Biden urged some top CEOs at a White House meeting to raise the alarm on the debt limit. Democrats also have been trying to get centrist Senators to go along with a special exception from the filibuster for a debt limit hike, a move McConnell likely wanted to head off.

Sen. Chris Coons, D-Del., told CNN that “Mitch McConnell blinked” and that Democrats likely would accept his offer extend the debt ceiling to December. As a practical matter, the Treasury could then use extraordinary measures once again, pushing the next effect debt default to February 2022 or slightly latter.

Ultimately, Schumer and McConnell are playing a game of chicken, trying to pin or share the blame for a government default — or debt-limit increase — on the opposing party.

The debt limit hike also complicates, procedurally and politically, Democrat efforts to focus on a reconciliation bill. The White House, congressional leaders and progressives have backed off demands for a $3.5 trillion spending package. They are trying to get Sens. Joe Manchin and Krysten Sinema to accept something around $2 trillion in spending along with significant tax increases, but so far there’s no deal. Progressive, left-wing Democrats are blocking passage of a $1 trillion infrastructure spending bill until there is significant progress on the partisan reconciliation package.

Dow Jones Futures Today

Dow Jones futures rose a fraction vs. fair value. S&P 500 futures edged higher and Nasdaq 100 futures climbed 0.1%.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live

Stock Market Rally Attempt

The stock market rally attempt struggled in the morning, but rebounded to close up modestly, at session highs, as the McConnell debt-limit hike offer eased default fears.

The Dow Jones Industrial Average rose 0.3% in Wednesday’s stock market trading. The S&P 500 index climbed 0.4%. The Nasdaq composite gained 0.5%. The small-cap Russell 2000 dipped 0.5%, though it did finish near session highs.

Microsoft stock is a member of the Dow Jones, S&P 500 and Nasdaq composite. NYSE-listed CRM stock is on the Dow Jones and S&P 500.

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) climbed 0.7%, while the Innovator IBD Breakout Opportunities ETF (BOUT) retreated 0.7%.  The iShares Expanded Tech-Software Sector ETF (IGV) added 0.6%. MSFT stock and Salesforce are among the biggest IGV components, while Fortinet, Zscaler, Bill.com and PANW stock also are holdings. The VanEck Vectors Semiconductor ETF (SMH) edged up 0.3%.

SPDR S&P Metals & Mining ETF (XME) slumped 2% and Global X U.S. Infrastructure Development ETF (PAVE) dipped 0.1%. U.S. Global Jets ETF (JETS) fell 1.4%. SPDR S&P Homebuilders ETF (XHB) edged up 0.3%. The Energy Select SPDR ETF (XLE) lost just over 1% and the Financial Select SPDR ETF (XLF) edged up 0.1%.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) rose 0.8% and ARK Genomics ETF (ARKG) slid 1.3%. Several ARK ETFs have bought COIN stock.

Five Best Chinese Stocks To Watch Now

Affirm Spikes Again

AFRM stock as the fintech reached a partnership with Target. Affirm already works with Walmart (WMT) and forged a deal with Amazon.com (AMZN) in late August. Those deals have providing tremendous validation for Affirm and the “buy now, pay later” consumer financing boom.

AFRM stock shot up 20% to 133.70. That cleared a 133.27 handle buy point in a very deep cup-with-handle base going back to early February. Earlier in the session, Affirm stock was buyable as it began to rally from its 21-day line. But either entry was especially aggressive giving the current market correction.

Affirm stock has been had a series of big moves in just over two months. Shares jumped 15% on Aug. 2, in reaction to Square (SQ) agreeing to pay $29 billion for Afterpay. AFRM stock skyrocketed 47% on Aug. 30 following the Amazon partnership, then gapped up 34% on Sept. 10 on quarterly results.

Bitcoin Price

Bitcoin jumped 7% vs. 24 hours earlier to just above $55,000. The Bitcoin prices topped $55,300 intraday. SEC Chairman Gary Gensler said Tuesday that he wasn’t looking at a China-like crypto ban. Gensler has sought more oversight and curbs on crypto-currencies, but Tuesday’s comments suggested he’s not fundamentally opposed to alt-coins. Bitcoin has rallied strongly since falling to $41,000 in late September on China’s ban on crypto transactions.

Other digital coins were winners Wednesday, including Ethereum. MARA stock popped 4.8%, while GBTC gained 5.6%. COIN stock leapt 4.3%.

Market Rally Analysis

The stock market rally attempt showed resilience. The major indexes fell more than 1% intraday but rebounded for slim gains. The advance came on slightly higher volume than the prior session, another positive.

Software and Bitcoin plays led the way, though AFRM stock was the clear standout Wednesday.

Cheaper energy prices may have eased inflation fears somewhat, with Treasury yields retreating from highs. Those moves, along with hope for a debt-limit hike resolution, may be buoyed the stock market rally attempt, especially techs. But energy costs and the 10-year Treasury yield remain in uptrends.

Wednesday was day two of a stock market rally attempt for the S&P 500 and Nasdaq, which both undercut recent lows on Monday. The Dow Jones was on day four of a rally attempt. That means the Dow could stage a follow-through day at any time, confirming the new uptrend. Generally, it’s preferable to see a broader follow-through day, via the S&P 500 or Nasdaq, but Dow Jones FTDs can and do work. Also, sometimes one index will stage a follow-through, with the other indexes providing confirmation later.

But just because the major indexes could stage follow-through days doesn’t mean they will. While Wednesday’s action was encouraging, this remains a stock market in correction.

The September jobs report is due Friday morning. That could be a catalyst for big market gains or losses. Investors likely will want to see stronger job growth than in August, but not so strong as to trigger a big spike in Treasury yields.

Time The Market With IBD’s ETF Market Strategy

What To Do Now

The stock market rally attempt had a slightly positive session, a big improvement from the morning. Investors who snuck into growth stocks the past couple of days are probably sitting on modest gains. But those gains could quickly disappear. Investors may want to take quick partial profits on any decent gains and absolutely must be ready to cut losses short.

There’s nothing wrong with being entirely in cash, or not making any new moves while holding onto a couple long-term winners.

If the stock market rally is confirmed and continues to act well, there will be opportunities. So be prepared by bulking up your watchlists and staying engaged.

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.

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US

As Debt Ceiling Vote Looms, Democrats Reconsider Filibuster

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WASHINGTON — With a federal default projected in less than two weeks, leading Senate Democrats increasingly see the Republican blockade against raising the federal debt limit as clear justification for changing the chamber’s filibuster rule, a long-shot effort that so far has lacked the unanimous support within their ranks needed to succeed.

President Biden, who has sent mixed signals for months about whether he supports scrapping the filibuster, gave fresh momentum to the idea on Tuesday when he told reporters at the White House that it was a “real possibility” that Democrats could create an exception from the rules and allow the debt ceiling to be raised with a simple majority.

Republicans were expected on Wednesday to block Democrats’ latest effort to boost the legal cap on government borrowing so it can keep paying its bills, with 12 days to go until the Oct. 18 date the Treasury Department has projected for reaching the limit. Senator Mitch McConnell, Republican of Kentucky and the minority leader, has said Democrats, who control Congress and the presidency and are proposing trillions in future spending, must supply all the votes for such an increase, but he and other Republicans have filibustered their attempts to do so.

Under longstanding Senate rules, any single member may object to ending debate on legislation, a practice known as a filibuster that effectively stops a bill in its tracks unless proponents can muster a three-fifths majority — or 60 votes — to move it forward. In the 50-50 Senate, that means Democrats need at least 10 Republicans to join them in breaking a filibuster, on the debt ceiling measure or anything else.

Democrats, who discussed the prospect at a private lunch Tuesday before Mr. Biden’s comments, say the Republican intransigence on the debt limit has provided the best argument yet for curbing the filibuster.

“More and more people are drawing that conclusion,” said Senator Richard J. Durbin, Democrat of Illinois, the No. 2 Democrat. “I think people feel the supermajority on the debt ceiling is a bridge too far.”

Yet it is not clear whether enough people are drawing that conclusion. The chief impediment to changing the filibuster has been the resistance of centrist Democratic Senators Joe Manchin III of West Virginia and Kyrsten Sinema of Arizona, and there is no indication that they have changed their stance in response to the current debt limit drama.

They argue that the procedural weapon can foster bipartisanship and provide guardrails against either party acting too extremely. Mr. Manchin earlier this week dismissed the idea of any change in the filibuster for the debt limit, but at Tuesday’s private luncheon, he and Ms. Sinema were silent on the matter. Mr. Manchin has also said the government must not be allowed to default.

Democrats urging a change in filibuster rules said they hoped the nature of the debt limit fight, with widespread warnings of global economic calamity if the government defaults and Republicans’ refusal to negotiate, would persuade the two Democrats that it was time to put aside their misgivings and act.

“Republicans are making the case more powerfully than I could a million times on the floor,” said Senator Richard Blumenthal, Democrat of Connecticut and a longtime filibuster foe. “What they are doing is obstruction and utterly exposes the filibuster. And it is not just inconvenience. It is desperately dangerous.”

Democrats could change the rules through a series of floor maneuvers with the votes of all 50 of their members and the tiebreaking vote of Vice President Kamala Harris. They say any “carve out” for the debt limit would apply specifically to that legislation and not extend to other measures. But any move to alter the filibuster would intensify calls to weaken it for other Democratic priorities that Republicans are uniformly blocking, notably a voting rights measure that Democrats say is urgently needed to offset efforts by Republicans at the state level to impede voting by minorities and others.

Mr. McConnell has threatened to bring the Senate to a standstill if Democrats undermine the filibuster. He has said repeatedly that Democrats should instead employ the budget process known as reconciliation to raise the debt limit, which would allow them to take advantage of rules that shield certain fiscal legislation from a filibuster.

“There is already an existing carveout where Democrats can do it themselves — it’s called reconciliation,” Senator Mitt Romney, Republican of Utah, said on Twitter.

But Democrats say the reconciliation process would consume too much time and is not assured of succeeding when the threat of a default is looming and the nation’s credit could be downgraded at any time. They say that if Republicans do not want to vote to increase federal borrowing power, they should simply allow Democrats to do it on their own.

“Look, the best way to get this done is just for Republicans to get out of the way,” Senator Chuck Schumer, Democrat of New York and the majority leader, said Tuesday. “None of them have to vote for a debt ceiling; let the 50 Democrats do it.”

Activists have been clamoring all year for Democrats to jettison the filibuster so they can advance the party’s agenda while they retain control of Congress and the White House. They have seized on the debt limit impasse as fresh ammunition.

“Senate Democrats are hurtling toward an easy choice,” said Eli Zupnick, spokesman for the anti-filibuster group Fix Our Senate. “Allow Senator McConnell to crash the economy or finally tackle the outdated and abused Senate filibuster that gives him the power to do so.”

Lawmakers have warned that any change to the filibuster could have far-reaching effects and provoke retaliation by the opposing party.

In 2013, Democrats frustrated by a Republican blockade of President Barack Obama’s judicial nominees changed the rules to allow the nominees to advance on a simple majority vote. Democrats exempted Supreme Court nominees from the change, but Republicans in 2017 moved quickly to apply the new rules to the high court, allowing President Donald J. Trump to seat three new Supreme Court justices during his term.

Lawmakers also say that ending the filibuster would allow one party to erase legislation enacted by the other when it assumes power.

“This is dangerous for both sides,” Senator Richard Shelby, Republican of Alabama, said.

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US

Democrats explore new options to raise debt ceiling amid deepening standoff with GOP

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One of the fiercest opponents to changing the filibuster rules, West Virginia Sen. Joe Manchin, insisted on Tuesday that Congress wouldn’t let the country default, though it’s still highly uncertain if he and 49 other Democrats would vote to change the rules even temporarily. President Joe Biden called the prospect of Democrats adopting a carve out of the filibuster rules “a real possibility” on Tuesday.

Senate Democrats are also discussing whether the White House can use administrative procedures to avoid default, an issue that could be the subject of a court fight if Biden were to greenlight that procedure.

At a caucus lunch on Tuesday, Democrats discussed an array of options on how to proceed next given that Republicans are planning to filibuster the debt ceiling hike on Wednesday. That will deny Democrats the 60 votes needed to proceed toward a final up-or-down vote in the evenly divided Senate.

With time of the essence before an October 18 deadline, Democrats at the lunch roundly rejected GOP demands to go through a time-consuming procedure known as “budget reconciliation,” arguing they should not heed the calls of Senate GOP leader Mitch McConnell and the politically charged series of amendment votes they would be forced to endure through that complicated process.

Instead, they discussed a series of other Plan B options, including Biden using authority under the 14th Amendment that says the validity of public debt “shall not be questioned,” the sources said. Democrats fully recognized this idea is untested in the courts, but also said Republicans would risk being blamed for putting the full faith and credit of the United States in jeopardy if they sued over such a move.

The other option discussed at lunch Tuesday was employing a complex parliamentary procedure — known on Capitol Hill as the nuclear option — that would essentially nullify the 60-vote requirement to break a filibuster to raise the debt ceiling, allowing a simple majority to do so instead. The issue also came up at a private lunch last Thursday, the sources said, and Democrats said the idea of making a temporary, one-time change in the rule was also being considered.

“We can carve out a one-time exception to the rules for the purpose of protecting the economic well-being of every American,” one Democratic senator said.

Yet going that route would require the support of all 50 Democrats — including Manchin and Kyrsten Sinema of Arizona, both of whom have been furiously opposed to weakening the 60-vote requirement and both of whom did not broach the topic at the closed-door lunch, the sources said.

Manchin told CNN on Monday to “forget the filibuster,” meaning that changing the rules was off the table for him. Yet after the lunch Tuesday, Manchin would not say if he would oppose a “carve out” in the filibuster rules to allow the debt ceiling to be raised. He told CNN the solution now lies in the hands of Senate Democratic leader Chuck Schumer and McConnell to cut a deal on the issue.

“The bottom line is they’ve got to work it out,” Manchin said. “The leadership has got to get together and work this out for the sake of this country.”

Manchin added: “We’re not going to default. I guarantee you this country will not default. This Congress will not default. It’s going to be painful, I think, for some people. But we are not going to default.”

GOP standing firm against providing votes on debt ceiling

Democrats say they hope that Republicans will relent to avoid the prospects of an economic catastrophe.

“Right now we are two weeks away and I have confidence that Republicans — at least some of them — will see the light of day on this,” said Senate Budget Chairman Bernie Sanders, a Vermont independent who caucuses with Democrats.

White House officials have reached out to top US business leaders about a potential meeting with Biden, a source familiar tells CNN. If the meeting comes to fruition Wednesday, it would be seen as an effort to increase pressure on Republicans.

But Republicans have aligned themselves closely with McConnell, who has been warning since this summer that the GOP won’t lift a finger to raise the debt limit.

With fewer than 14 days until the deadline, Congress is flirting with a fiscal calamity. In 2011 when Congress was in a similar showdown over the debt limit, the country’s credit rating was downgraded. But Democrats have so far punted on questions about starting the special budget process, throwing questions to their leadership or largely arguing it’s too late.

“I don’t see any way that reconciliation can get done without a debt downgrade since we are in the zone already,” said Sen. Mark Warner, a Virginia Democrat.

Schumer added: “Reconciliation is a drawn-out, convoluted process. We’ve shown the best way to go. We are moving forward in that direction.”

The budget process would require the Senate to engage in a lengthy debate process, two marathon voting sessions known as a vote-a-rama, and ultimately would require Republicans to show up in committees to help Democrats advance the process.

One Senate expert told CNN that it could be finished in about a week if Republicans cooperated. And Senate GOP Whip John Thune said Tuesday that his party would be open to speeding up the process if Democrats went that route.

“They say it’s too unwieldy, takes too much time,” the South Dakota Republican said. “Well it can be addressed through agreement.”

But Democrats say that Republicans cannot be trusted to get an agreement on this issue, since any single senator can object to draw out the process. And already, Republicans have objected to Schumer’s efforts to allow the debt ceiling increase to be passed at a 51-vote threshold — just with Democratic votes — as the GOP has instead demanded they use the lengthy budget process to circumvent a filibuster and eat up precious floor time.

Democrats are slowly marching into a no-win situation. Under the budget process, Democrats would be required to specify the exact amount they would increase the country’s borrowing limit by even as the debt stands at nearly $29 trillion. The number would put Democrats facing reelection in a difficult political position. Under the current legislation they are trying to pass on Wednesday, Democrats would be “suspending” the debt limit until after the 2022 midterms without specifying a number.

But if Democrats don’t resolve the standoff, their party — which controls all levers of government — could face the bulk of the blame from voters hurt by the Washington stalemate.

“There are a lot of options, but Democrats have the majority and we have to act like it,” said Sen. Tim Kaine, a Democrat from Virginia. “If Republicans are going to flirt with default, we can point that out, but at the end of the day, we have to make sure the nation doesn’t default.”

This story has been updated with comments from President Joe Biden.

John Harwood, Kaitlan Collins and Maegan Vazquez contributed to this report.

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US

Debt ceiling deadline looms as Washington stalemate grinds on – live | US news

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18:03

White House press secretary Jen Psaki made a point yesterday to note that Joe Biden would be meeting with Democrats about the $3.5tn reconciliation bill with the “recognition that this package is going to be smaller than originally proposed.”

Reminder that this comes as centrists like Joe Manchin and Kyrsten Sinema have been aligning with Republicans in believing that the package was too large while progressives want it as is.

The Washington Post is now reporting from inside these closed meetings, hearing from their sources that Biden is proposing bringing the package down to $1.9tn to $2.2tn – well lower than the original $3.5tn plan.

Representative Pramila Jayapal, leader of the Congressional Progressive Caucus, has countered with a minimum of $2.5tn, arguing that it would take up to $2.9tn to cover all the key programs proposed.

Manchin so far seems open to Biden’s proposed range.

Manu Raju
(@mkraju)

Manchin signals openness to Biden’s range of $1.9T-$2.2T

But Jayapal signaled to Biden little appetite to go below $2.5T, per sources on call

A number of major sticking points remain as Schumer wants a deal within days: pic.twitter.com/WxFnHXQDcY

October 5, 2021











17:26

Senate majority leader Chuck Schumer is drawing a line in the sand and saying budget reconciliation is absolutely not an option for when it comes to bypassing the Republicans and their filibuster and raising the debt limit.

Manu Raju
(@mkraju)

Senate Majority Leader Chuck Schumer just told me “can’t do it” when asked if the budget reconcilation process is on the table to raise the debt ceiling by the Oct. 18 deadline.

“Reconcilation is very risky, risking default and risking downgrade. Can’t do it,” he said

October 5, 2021

This comes with senate minority leader Mitch McConnell writing directly to Joe Biden to tell him get Schumer and Pelosi to essentially get behind budget reconciliation because Republicans aren’t budging.

Leader McConnell
(@LeaderMcConnell)

My letter to President Biden this morning on congressional Democrats’ duty to handle the debt limit: pic.twitter.com/U3G9QMPJwY

October 4, 2021

So let us recap at the options before us, as it pertains to raising the debt limit and avoiding general economic catastrophe:

Manu Raju
(@mkraju)

Here are the options for raising debt limit: •An agreement to set the vote to suspend debt limit at a 51-vote threshold, but Republicans are objecting to that. (Any one senator can force a 60-vote threshold)

October 5, 2021

Manu Raju
(@mkraju)

•Getting 60 votes to overcome a filibuster. But that would require 10 GOP votes, which isn’t happening
•Democrats using nuclear option to change filibuster rules to allow debt ceiling hike to advance with 51 votes. Manchin rejects this, so Dems don’t have the votes to do it

October 5, 2021

Manu Raju
(@mkraju)

•Dems using reconciliation to circumvent a filibuster. That would require two marathon voting sessions on the floor — known as vote-a-rama — and could take at least two weeks to go through full legislative process without an agreement to speed it up. Ds have resisted this move

October 5, 2021

Again: Democrats, from Schumer to Biden, are very much against the idea of going the budget reconciliation route:

NowThis
(@nowthisnews)

‘Why let McConnell off the hook?’ — Jen Psaki slams Republicans for spending like ‘drunken sailors’ during the previous administration pic.twitter.com/GykX3XWJfd

October 4, 2021











17:04

Here’s some more information on the suspicious vehicle found outside the US Supreme Court.

US Capitol police say they found no weapons in the vehicle. However:

Haley Talbot
(@haleytalbotnbc)

Officer Bell said the suspect told them “the time for talking was done” when the officers first approached the illegally parked car

October 5, 2021











16:26

Police respond to suspicious vehicle outside US Supreme Court

US Capitol police responded to a suspicious vehicle outside the US Supreme Court.

Authorities have a 55-year-old man from Michigan in custody related to the incident.

Jonathan Martin
(@jmartNYT)

This is growing depressingly routine https://t.co/PbZdXj1GL6

October 5, 2021

U.S. Capitol Police
(@CapitolPolice)

The suspect has been identified as Dale Paul Melvin (DOB: 9/4/66) of Kimball, MI.

October 5, 2021

The nine justices began their new term on Monday with their first in-person oral arguments since the start of the pandemic.

Updated











16:21

Francis Collins to step down as NIH director

After nearly three decades at the agency, Francis Collins will be stepping down as director of the National Institutes of Health at the end of the year, he announced today.

Francis S. Collins
(@NIHDirector)

It’s been a privilege & honor to serve as #NIH Director for over 12 years. However, I believe no person should hold this position for too long. So with deep gratitude to this great agency & the people who carry out its mission, I’ve decided to step down. https://t.co/rwUnKiW3V5

October 5, 2021

The 71 year-old physician-geneticist served as director for 12 years under three consecutive presidents – the first presidentially appointed NIH director to serve in more than one administration and the longest-serving NIH director.

Under his tenure, NIH’s budget grew by 38%, from $30bn in 2009 to $41.3bn in 2021.

“Dr. Francis Collins is one of the most important scientists of our time,” Joe Biden said in a statement. “After I was elected president, Dr. Collins was one of the first people I asked to stay in his role with the nation facing one of the worst public health crises in our history.”

“Millions of people will never know Dr. Collins saved their lives. Countless researchers will aspire to follow in his footsteps. And I will miss the counsel, expertise, and good humor of a brilliant mind and dear friend.”











15:59

Senate will hold planned Wednesday vote on debt ceiling suspension

With Republican leader Mitch McConnell holding fast to using the filibuster to block the Democrats, senate majority leader Chuck Schumer said the Senate will go forward with Wednesday’s planned vote to suspend the debt ceiling.

Tony Romm
(@TonyRomm)

Schumer says Senate plans to hold planned Wed vote on debt ceiling suspension, giving GOP lawmakers a choice to bring “Republican-manufactured debt ceiling crisis to a swift end” or the country can barrel toward default

October 5, 2021

Tony Romm
(@TonyRomm)

Schumer: “It is hard to believe one of America’s two major parties would be willing to jeopardize our entire economy… just because they dont like the party that won the election is following through on its agenda to help American families.”

October 5, 2021











15:41

Joe Biden spent yesterday in virtual meetings with the progressives of the Democratic party, talking about the $3.5tn reconciliation bill. White House press secretary Jen Psaki was upfront that the package would be “smaller than originally proposed”, with centrists Joe Manchin and Kyrsten Sinema standing fast behind the notion that the package was too large, and that the meetings would be to determine priorities and bottom lines.

Today the meetings continue ahead of his Michigan trip:

Scott Wong
(@scottwongDC)

.@POTUS on Zoom call now with House Dem frontliners after meeting with progressives yesterday on his domestic agenda.

Biden heads to Michigan later today to sell Build Back Better

October 5, 2021

Updated











15:23

The Facebook whistleblower hearing is underway before the Senate and our west coast tech reporter Kari Paul will be live blogging the proceedings.

Frances Haugen, a 37 former Facebook employee, came forward on Sunday to accuse the social media giant of putting profit over safety.

Follow here:











15:10

Stephanie Grisham, former White House press secretary for Donald Trump. admitted on CNN today that she “probably wasn’t” honest during her interviews with Fox News and lied on at least one occasion about former White House chief of staff John Kelly, a retired four-star Marine Corps general.

Alli Hedges Maser
(@AllisonLHedges)

Stephanie Grisham admits lying about John Kelly, calling it one of her “biggest regrets.”

Also says she “probably wasn’t” honest during her Fox News interviews. pic.twitter.com/Es1h3a1eod

October 5, 2021

In 2019, Grisham had said, “I worked with John Kelly and he was totally unequipped to handle the genius of our great president.”

Grisham, who is currently on a publicity tour for her tell-all book, I’ll Take Your Questions Now, said Trump told her to say that after Kelly disparaged Trump in some way. “I don’t speak that way,” she said. “He dictated that to me, word for word.”

“At the time, I felt, I was his spokesperson,” Grisham said. “He told me to do it. I knew he was probably sitting there, watching TV, waiting for it. And so I put it out. It’s one of my biggest regrets. I apologized to general Kelly and Mrs Kelly in the book about it.”











14:54

Former vice president Mike Pence went on Fox News to say that the media’s focus on the 6 January attack on the US Capitol – in which a pro-Trump mob chanted “Hang Mike Pence” – is all to distract from Joe Biden and his attempts to pass his domestic agenda.

“I believe that our entire focus today should be on the future,” Pence said.











14:45

Biden flies to Michigan as Washington stalemate grinds on

Ahoy there, live blog readers. Happy Tuesday.

Joe Biden heads to Michigan today to talk about … yep, what else, the bipartisan infrastructure bill and the reconciliation bill (also known as the Build Back Better Act).

The $1tn infrastructure bill looking to improve roads, bridges, public transit and broadband and the $3.5tn reconciliation bill focusing on the “human infrastructure” of social services and environmental measures are the hot topics of the week, with an 18 October deadline looming on the debt limit and Republicans pointing at these two bills as proof that spending by Democrats is out of control.

Republicans have been saying since July that they will not vote to raise the debt ceiling and that the Democrats will have to do it on their own. The Republicans are once again utilizing the filibuster, which requires 60 votes to break, and have twice blocked Democrats’ efforts to raise the debt limit. It’s expected they will block their efforts come Wednesday too.

The Democrats could raise the ceiling with a majority vote of 51, but they are already trying that with the spending bill and do not want to complicate affairs. They also point out that they voted with Republicans to raise the ceiling when Republicans and the Trump administration were spending wildly themselves.

The Senate minority leader, Mitch McConnell, sent a letter directly to Biden yesterday, bypassing the Senate majority leader, Chuck Schumer, and the House Speaker, Nancy Pelosi, reiterating how serious he is about forcing Democrats to do this on their own.

Meanwhile, Democrats are continuing to suss out the ins and outs of reconciliation bill, with centrist senators Joe Manchin and Kyrsten Sinema pushing to make the package smaller and progressives fighting to vote on it as is alongside the infrastructure bill so it has a better chance of passing.

Much more to come, of course.



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Business

Federal Reserve’s reverse repo program sees record $1.6 trillion demand on Thursday

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As the clock ticked down on the debt-ceiling standoff in Washington, Wall Street firms parked a record $1.605 trillion of cash overnight in the Federal Reserve’s popular reverse repo program.

Congress Thursday afternoon approved a temporary funding measure to extend government spending through Dec. 3, while averting a partial shutdown hours before a midnight deadline, but the federal debt ceiling has yet to be lifted.

See: What happens if the U.S. defaults on its debt?

As the drama played out on Capitol Hill, a total of 92 firms took part in the Fed’s Thursday reverse repo operation. The program, run out of the Federal Reserve Bank of New York, allows banks, government sponsored enterprises and some of the world’s largest investment firms a short-term haven to park cash, while earning 5 basis points overnight.

Earlier in September, the Fed doubled the cap each counterparty can pledge to the overnight facility to $160 billion each. The program has grown in popularity in recent months as trillions worth of fiscal and monetary stimulus course through the U.S. economy and financial markets.

The latest uptick in demand was not unexpected, however, with some Wall Street analysts forecasting in early August the surge, due to the shrinking Treasury-bill market, the typically volatile year-end period and rancor in Washington over government spending.

U.S. stocks sold off sharply Thursday, the last day of September and the quarter, with the Dow Jones Industrial Average
DJIA,
-1.59%
shedding 456 points, or 1.6%, while booking its worst monthly loss since October 2020.

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World

Zambia’s Chinese debt nearly twice official estimate, study finds

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Zambia’s President Hakainde Hichilema addresses the 76th Session of the United Nations General Assembly at U.N. headquarters in New York, U.S. on September 21, 2021. Mary Altaffer/Pool via REUTERS/File Photo

JOHANNESBURG, Sept 28 (Reuters) – Zambia’s debt to Chinese public and private lenders is $6.6 billion, almost double the amount disclosed by the previous Zambian government, an analysis of loan data by the China Africa Research Initiative (CARI) has estimated.

Copper-rich Zambia became Africa’s first coronavirus-era sovereign default last November and its ongoing debt restructuring has become a test case of Western multilateral efforts for countries to fully disclose their borrowings.

Zambia’s previous government, led by Edgar Lungu, said its Chinese debt stood at $3.4 billion. But the estimate published by CARI on Tuesday chimes with recent comments from newly elected President Hakainde Hichilema, who took office last month, that the debt load is likely higher.

Zambia’s finance ministry said its official figures were “broadly consistent” with the CARI estimate, adding that the government’s reporting on public debt was accurate and transparent.

“Key creditors and stakeholders, including the International Monetary Fund and advisers to the bondholders’ ad hoc committee have received more detailed data on the makeup of the public debt under each category under non-disclosure agreements,” the finance ministry added in a statement.

The country’s international creditors, with which the government is in talks, have complained that the lack of detail on Zambia’s China loans – which carry specific non-disclosure terms – has hindered the debt restructuring process. read more

“Given the complicated situation … reaching consensus on burden-sharing is likely to prove exceptionally difficult,” the CARI researchers who made the new estimate, Deborah Brautigam and Yinxuan Wang, wrote.

The $6.6 billion figure is based on Chinese loan data collected by CARI at the Johns Hopkins University School of Advanced International Studies. It is likely to continue to grow as it does not include penalties or interest arrears that continue to build up.

China is Africa’s largest creditor. It is part of the World Bank and International Monetary Fund-supported Debt Service Suspension Initiative which has temporarily frozen debt payments to dozens of the world’s poorest countries but is being urged to do more in terms of disclosure.

Tuesday’s study estimated that $7.77 billion in loans to Zambia and its state-owned enterprises were disbursed by 18 major and minor Chinese banks or funds from 2000 to August 2021. Of those, Zambia has repaid at least $1.2 billion.

The estimate does not change Zambia’s total debt load of $14.3 billion, the researchers said, but shows that the Lungu government “was not transparent about the heavy weight of Chinese financiers among its many external creditors”.

Bwalya Ngandu, finance minister under Lungu, has said it is not true that Zambia’s debt numbers were understated. “We have never hidden any debt,” he said in a statement this month.

The researchers found six instances in which Chinese lenders cancelled debt owed by Zambia, for a total of $392 million.

Reporting by Helen Reid in Johannesburg; Additional reporting by Chris Mfula in Lusaka; Editing by Marc Jones, William Maclean nd Nick Macfie

Our Standards: The Thomson Reuters Trust Principles.

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