The daily business briefing: October 15, 2020

Harold Maass
Mnuchin testifies
TONI L. SANDYS/POOL/AFP via Getty Images

1.

Mnuchin says coronavirus relief deal doubtful before election

Treasury Secretary Steven Mnuchin said Wednesday that the White House and congressional Democrats probably would not be able to reach a deal on a new round of coronavirus relief until after the election. "I'd say at this point getting something done before the election and executing on that would be difficult, just given where we are," Mnuchin said. When asked whether Democrats were reluctant to give President Trump a victory three weeks before Election Day, he said that "definitely is part of the reality." House Speaker Nancy Pelosi (D-Calif.) defended the $2.2 trillion relief package and said the White House's $1.8 trillion counterproposal was inadequate. "It's like you're bleeding and they keep putting band-aids on it," she said. "But they're not addressing the problem." Pelosi's spokesman tweeted that she and Mnuchin would discuss the matter again on Thursday. [The Washington Post]

2.

Goldman Sachs profit nearly doubles

Goldman Sachs on Wednesday reported that its third-quarter profit nearly doubled to $3.62 billion, beating Wall Street expectations. The news was the latest sign that big banks are managing to continue to make money despite the pandemic and recession as their trading desks handle rebounding business remotely and corporate bankruptcies level off. The five largest U.S. banks have now reported $23 billion in quarterly profits. "The markets continue to benefit from the unprecedented monetary and fiscal support by central banks and governments globally," Goldman CEO David Solomon said Wednesday. Kyle Sanders, an analyst who covers the financial services industry for Edward Jones, said record low interest rates are key. "It's the same story at every bank in the industry right now: Lower credit costs are helping restore profitability," Sanders said. [The Wall Street Journal, The Associated Press]

3.

Wells Fargo fires 100 workers over improper access to coronavirus funds

Wells Fargo has fired more than 100 employees for improperly receiving coronavirus relief funds, Bloomberg reported Wednesday, citing a person with knowledge of the situation. The bank determined that the workers fraudulently got the money from the U.S. Small Business Administration "by making false representations in applying for coronavirus relief funds for themselves" from the Economic Injury Disaster Loan program, according to an internal memo reviewed by Bloomberg. The alleged fraud was not related to the employees' work for the bank. JPMorgan Chase & Co. earlier found that more than 500 of its employees had accessed funds through the same program, in some cases improperly. U.S. banks were encouraged to uncover suspicious deposits from the program to customers and staff. [Bloomberg]

4.

Report: Trump donors profited from White House coronavirus warning

President Trump's economic advisers privately warned the board of the conservative Hoover Institution of looming economic fallout from the coronavirus during a Feb. 24 White House meeting, The New York Times reported Wednesday, citing a memo hedge fund consultant William Callahan wrote summing up the encounter. On the same day, President Trump told the public, "Stock market starting to look very good to me!" Many investors who saw or heard about the memo viewed it as an early warning to wealthy Republican donors of economic damage from the pandemic at a time when Trump was insisting there was no threat, and some investors used the warning to their financial advantage, according to the Times. [The New York Times]

5.

Stock futures fall as coronavirus relief stalemate continues

U.S. stock futures fell early Thursday as prospects dimmed for a new coronavirus relief package before the Nov. 3 election. Futures for the Dow Jones Industrial Average, the S&P 500, and the tech-heavy Nasdaq were down by about 1 percent or more several hours before the opening bell, after Treasury Secretary Steven Mnuchin said it would be difficult to resolve the differences between Republicans and Democrats on a new stimulus, and House Speaker Nancy Pelosi (D-Calif.) said the administration's proposal "falls significantly short" of what America needs. The uncertainty fueled market losses on Wednesday. Investors also continue to watch corporate earnings. Banking giants Goldman Sachs and Bank of America reported earnings that beat analysts' expectations on Wednesday, while Wells Fargo fell short. [CNBC]