• Treasury Secretary Steven Mnuchin said that reaching a deal on a new economic stimulus package before the election would be “difficult, just given where we are,” following an hour-long conversation he had with House Speaker Nancy Pelosi on the issue, though the California Democrat’s spokesman called the discussion “productive” and said the pair would speak again today. A person familiar with the matter confirmed that Pelosi has told House Democratic leaders that the White House is “not addressing the problem,” referring to the Trump administration’s refusal to embrace a national strategic testing plan, though Pelosi and Mnuchin have agreed on a fresh round of $1,200 stimulus checks. (The Washington Post) 

• In February, as President Donald Trump and his advisers insisted publicly that the coronavirus pandemic was “very much under control,” board members of the conservative Hoover Institution received briefings from senior members of the White House economic team, including Tomas Philipson and Larry Kudlow, on the dire outlook for the economy due to COVID-19, spurring one hedge fund consultant who attended the gathering to write a document describing the sessions. The document, which spread among the investing world, gave elite traders access to information from the administration that gave them an advantage over others in the ensuing turmoil that hit the markets, according to interviews with eight people who received a copy of the memo or who were briefed on aspects of it. (The New York Times) 

• Wells Fargo & Co. has fired more than 100 employees for allegedly defrauding the Small Business Administration “by making false representations in applying for coronavirus relief funds for themselves,” according to an internal memo. Similarly, JPMorgan Chase & Co. earlier found that 500 employees had used the Economic Injury Disaster Loan program, with dozens doing so improperly. (Bloomberg)

• Morgan Stanley quarterly profit rose 25 percent to $2.7 billion. Revenue rose 16 percent from the year-ago period to $11.7 billion. (CNBC)

Fed Official Wonders Whether Treasury Market Can Handle Massive Issuance Alone
Michael S. Derby, The Wall Street Journal

The Federal Reserve’s point man on financial regulation said the Treasury market has grown so large that some level of central bank involvement may need to continue to ensure orderly trading conditions. Randal Quarles, the Fed’s vice chairman for supervision, was discussing the outlook for the central bank’s $120 billion-a-month in purchases of Treasury and mortgage debt. 

Pelosi walks tightrope in stimulus talks amid pressures of election, economy
Rachael Bader and Erica Werner, The Washington Post

Speaker Nancy Pelosi is taking a gamble in the coronavirus relief negotiations, playing hardball in eleventh-hour talks when she believes she has more leverage over President Trump than ever before. For weeks, the California Democrat has been drawing a tough line with a president increasingly desperate to produce a pre-Election Day achievement as he lags in polls.

Millions of workers face jobless benefits cliff with lifeline set to expire
Eleanor Mueller and Rebecca Rainey, Politico 

A failure by Congress to enact a new economic relief package would prolong the pain of the coronavirus crisis for many Americans, but those without jobs face a special threat — millions could run out of unemployment benefits altogether by the end of the year. The Senate reconvenes on Monday, giving lawmakers about two weeks to send legislation to President Donald Trump before the Nov. 3 election. 

Trump Stresses Economic Record in Virtual Speech
Rebecca Ballhaus, The Wall Street Journal

President Trump cast the November election as a choice between “historic prosperity” and a “steep depression,” as he seeks to turn the focus toward the economy and away from the pandemic in the campaign’s final stretch. In a virtual speech from the Rose Garden to the Economic Clubs of New York, Florida, Washington, Chicago, Pittsburgh and Sheboygan, Wis., Mr. Trump touted the state of the pre-pandemic U.S. economy and predicted dire consequences if former Vice President Joe Biden wins the election.

From peak city to ghost town: the urban centres hit hardest by Covid-19
Valentina Romei and John Burn-Murdoch, Financial Times

FT research shows London and New York have suffered the most from the pandemic, but more substantial change lies ahead.

The Verdict on Trump’s Economic Stewardship, Before Covid and After
Jon Hilsenrath, The Wall Street Journal

Donald Trump has presided over two economies during his time in office. In the first, which lasted until March, the economy reached historic milestones for jobs, income and stock prices. 

Biden Says He Spoke With Warren Buffett About U.S. Leadership
Tyler Pager and Katherine Chiglinsky, Bloomberg

Democratic presidential nominee Joe Biden told donors on Wednesday that he recently spoke by phone with billionaire investor Warren Buffett about America’s leadership role on the global stage.

Stimulus Doomed by Diverging Goals of Trump, Pelosi, McConnell
Billy House and Laura Davison, Bloomberg

Even with the U.S. still reeling from the coronavirus pandemic, Washington fell short in delivering more stimulus before the election, whipsawed by President Donald Trump and hobbled by the diverging agendas of the top Republican and Democrat in Congress. Now, voters will help decide what happens next. House Speaker Nancy Pelosi, a self-proclaimed “master legislator,” entered the talks in July with a reputation for legislative acumen honed over years of consequential budget battles and in previous showdowns with Trump. 

Fed’s Clarida Says Continuing Support Will Be Needed to Sustain Recovery
Michael S. Derby, The Wall Street Journal

Federal Reserve Vice Chairman Richard Clarida said Wednesday that even though the U.S. economy’s recovery has been surprisingly strong after a heavy hit earlier in the year, it will need continuing support to recover what was lost so far during the coronavirus pandemic. The downturn that struck earlier this year “may go into the record books as the briefest recession in U.S. history,” Mr. Clarida said.

Unemployment Claims Expected to Hold at High Levels
Sarah Chaney and Gwynn Guilford, The Wall Street Journal

The number of new applications for unemployment benefits likely remained above pre-pandemic highs last week, as persistent layoffs hold back the economic recovery. Economists expect unemployment claims logged in at 830,000 last week, continuing to exceed the pre-pandemic high point of 695,000. 

China Raises $6 Billion in Dollar-Bond Sale
Frances Yoon, The Wall Street Journal

China raised $6 billion with its latest international bond sale, matching a record set last year, ahead of economic data that is likely to show growth is recovering toward pre-pandemic levels. Despite heightened tensions with the U.S., this was China’s first bond sale in recent years targeted partly at investors in America. 

Stocks Sink on Virus Curbs, Despair Over Stimulus: Markets Wrap
Todd White, Bloomberg

Stocks sank with U.S. futures as Europe’s biggest cities clamped down to curb the virus and hopes wilted for new stimulus from Washington. The dollar rose with Treasuries as a risk-off mood took hold.

High costs haunt Wells Fargo results years after scandal
Imani Moise et al., Reuters

Wells Fargo & Co’s profit plunged 57% in the third quarter, missing Wall Street’s expectations as persistent costs tied to its years-old sales practices scandal continued to haunt the bank. Like chief executives before him, new CEO Charlie Scharf, now one year on the job, has made cost cuts a cornerstone of his turnaround plan.

Bank Earnings Show Diverging Fortunes on Wall Street and Main Street
Emily Flitter and Kate Kelly, The New York Times

Hundreds of thousands of small businesses are closing for good. Temporary layoffs at larger companies are becoming permanent.

Citigroup Drops Suit Against Investcorp for Revlon Payment
Chris Dometsch and Katherine Doherty, Bloomberg

Citigroup Inc. is dropping claims against one of the entities it sued as part of an effort to get back $900 million the bank says it accidentally sent to a dozen Revlon Inc. creditors. In a court filing Wednesday, the bank sought to voluntarily dismiss its suit against Investcorp Credit Management LLC, which it said had received $18.9 million. Citigroup said in a statement it was “pleased to have these funds returned.” Investcorp declined to comment.

Top U.S. Banks See Long Road Ahead for Return-to-Office Plans
Shahien Nasipour, Bloomberg

Four of the nation’s largest banks updated their progress in recent days on return-to-office plans. The takeaway: Most workers won’t be back anytime soon.

Vista Equity’s Robert Smith Reaches Settlement With DOJ in Tax Probe
Miriam Gottfried and Dave Michaels, The Wall Street Journal

Robert Smith, the billionaire chief executive of Vista Equity Partners, has reached a $140 million settlement with the Justice Department, ending a yearslong criminal tax probe, according to people familiar with the matter. As part of the settlement, Mr. Smith will enter into a nonprosecution agreement, the people said. He will admit liability for additional taxes owed and not properly filing foreign bank account reports but won’t be prosecuted. 

Wall Street Set for Oil Trading Caps That Could Have Been Worse
Benjamin Bain, Bloomberg

Traders are about to be hit with new U.S. rules they’ve long resisted: the first-ever federal restrictions on how much hedge funds and other firms can speculate on key commodities such as oil and metals. Yet there is a silver lining in having the regulations finished while appointees of President Donald Trump are running government agencies.

How did Wells Fargo and Bank of America’s mortgage businesses perform in the third quarter?
James Kleimann, HousingWire

Though its earnings were disappointing overall, residential lending at Wells Fargo rebounded in the third quarter, both in terms of income and origination volume. The bank originated $62 billion in home loans during the third quarter, up 5% from $59 billion in the prior quarter. In the third quarter of 2019, Wells Fargo originated $58 billion in mortgages.

Tax Burden Equal to 70% Rate Crushes Americans Unable to Pay It
Steve Matthews, Bloomberg

Millions of low-income Americans are locked into poverty thanks to U.S. tax policy, Federal Reserve Bank of Atlanta researchers say. About a quarter of lower-income workers effectively face marginal tax rates of more than 70% when adjusted for the loss of government benefits, a study led by Atlanta Fed Research Director David Altig found.

Biden adviser declines to put timeline on plans to increase corporate tax rate
Naomi Jagoda, The Hill

An informal adviser to Joe Biden’s presidential campaign on Wednesday said he did not want to “litigate” when the Democratic nominee would pursue an increase in the corporate tax rate. “I’m not going to litigate the timing of that set of policies,” Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities, said at the Milken Institute’s 2020 virtual global conference.

Trump administration to consider adding China’s Ant Group to trade blacklist – sources
Humerya Pamuk et al., Reuters

The U.S. State Department has submitted a proposal for the Trump administration to add China’s Ant Group to a trade blacklist, according to two people familiar with the matter, before the financial technology firm is slated to go public. It was not immediately clear when the U.S. government agencies that decide whether to add a company to the so-called Entity List would review the matter.

Hackers look to buy brokerage log-ins on the dark web with Robinhood fetching highest prices
Kate Rooney and Yasmin Khorram, CNBC

As a new generation of investors flock to the stock market, criminals are looking for ways to exploit them.  Hackers have turned to the dark web, where log-ins for accounts at major brokerage firms are listed for sale, according to security analysts and listings seen by CNBC. 

Reopening the Pandemic Money Firehose
Kurt Schacht and Karina Karakulova, Morning Consult

One might think investors are “all-in” on the massive stimulus induced rally in stocks and other assets. The stimulus “firehose” is spraying money in all directions, in unprecedented volumes and with warp speed delivery.

Trump’s Taxes Were Not a Flaw in the System
Veronique de Rugy, The New York Times

When Americans recently learned how little President Trump has paid in taxes in the past 15 years and how he benefited from financial maneuvers, it reinforced the widespread belief that the rich don’t pay their fair share. Lost in the outrage is the fact that the tax provisions that allowed Mr. Trump to trim his tax bill were probably not illegal or the results of tax schemes concocted by anti-tax legislators.

How Have Households Used Their Stimulus Payments and How Would They Spend the Next?
Olivier Armantier et al., Liberty Street Economics

In this post, we examine how households used economic impact payments, a large component of the CARES Act signed into law on March 27 that directed stimulus payments to many Americans to help offset the economic fallout from the coronavirus pandemic.