GOVERNMENT

A Not-So-Peaceful Transfer of Power

Yesterday, what had typically been a routine process in presidential transitions descended into one of the darkest days for American democracy. 

Congress’s procedure to certify the election results in favor of Joe Biden was halted when a mob of President Trump’s supporters infiltrated the U.S. Capitol building. Shortly before, Trump held a rally in which he repeated lies that he won last year’s presidential election. 

• The Capitol was placed on lockdown and Vice President Mike Pence was rushed out of the Senate chamber.
• In response to the pandemonium, both the D.C. and Virginia units of the National Guard were activated. Washington, D.C., Mayor Muriel Bowser ordered a 12-hour curfew beginning at 6pm. 

As it happened

The president’s supporters appeared to overcome Capitol security without much trouble. Many lawmakers were ordered to shelter in place and some had to wear gas masks to protect themselves from tear gas as they evacuated the building. 

• Four people died as the Capitol was overrun. And two pipe bombs were recovered.

Zoom out: A group of Republican members of Congress, led by Texas Sen. Ted Cruz, started the day by trying to challenge the electoral count. Pence and Senate Majority Leader Mitch McConnell refused to join in.

Wall Street’s reaction? 

Like nothing happened—stocks actually climbed yesterday. The Dow touched a record high, likely meaning investors believe the rioting was more of a blip than an indicator of long-term chaos. 

Congress tried to channel that energy when it reconvened late last night to ratify Biden's Electoral College victory. 

CORPORATE

The Business World Responds

Yesterday evening, the country’s top business leaders expressed their disgust with the riots at the Capitol.

Some called out President Trump by name. The head of the National Association of Manufacturers, Jay Timmons, wrote that Trump “incited violence in an attempt to retain power.” Timmons urged Vice President Mike Pence to consider invoking the 25th Amendment to remove Trump from his position and “preserve democracy.”

• The trade group represents 14,000 companies in the U.S., including Pfizer and Exxon Mobil. Last year, it gave an award to Ivanka Trump for her support for the manufacturing industry. 

A snapshot of other statements from Corporate America

• JPMorgan CEO Jamie Dimon: "Our elected leaders have a responsibility to call for an end to the violence, accept the results, and, as our democracy has for hundreds of years, support the peaceful transition of power.”
• Apple CEO Tim Cook: "Today marks a sad and shameful chapter in our nation's history." 
• The head of the U.S. Chamber of Commerce: “Attacks against our nation’s Capitol Building and our democracy must end now.” 

Zoom out: Execs were growing anxious about the transition of power even before yesterday’s violence. On Monday, more than 170 biz leaders wrote a letter to Congress urging lawmakers to certify Biden’s win in the Electoral College. 

SOCIAL MEDIA

Social Media Silences Trump

Wondering why President Trump didn’t send a barrage of tweets last night? He couldn’t.

Yesterday, Twitter took the unprecedented step of removing three of Trump's tweets, then locked his account for 12 hours. Twitter cited “repeated and severe violations of our Civic Integrity policy” for the suspension. 

Twitter vs. Trump is nothing new

The company has flagged dozens of the president’s tweets for disputed or misleading information this election season. But Trump’s status as a world leader offered him special treatment under Twitter’s policies. 

• Yesterday, that status changed after the president posted a video in which he told Capitol rioters to go home but repeated false claims about how the election was stolen from him. “Our public interest policy—which has guided our enforcement action in this area for years—ends where we believe the risk of harm is higher and/or more severe,” Twitter Safety explained in a tweet.

Zoom out: Facebook, which has come under fire for the way it’s handed misinformation, also removed Trump’s video and banned Trump's account from posting for 24 hours (so did Instagram). As for Twitter, it said any future violations from the president’s handle will result in a permanent ban. 

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IMAGES

Scenes From a Shocking Day

Tayfun Coskun/Anadolu Agency via Getty Images

Win McNamee/Getty Images

SAUL LOEB/AFP via Getty Images

SAUL LOEB/AFP via Getty Images

ELECTION

A Peachy Sweep

Believe it or not, the mob taking over the Capitol wasn’t the only seismic news from Washington yesterday. The Democratic party also completed its Georgia senatorial sweep, after media outlets projected challenger Jon Ossoff would defeat GOP incumbent David Perdue in a runoff election. 

• Combined with Raphael Warnock’s win, Ossoff’s victory is enough to give the Dems the upper hand in the Senate.

That means…

It’s stimmy season. A Democratic-controlled Congress will seek to pass an additional $600 billion in coronavirus stimulus spending, per Goldman Sachs. That’s music to the ears of the business world, especially small-cap stocks in the Russell 2000, which ended the day up nearly 4%.

• Why? The Russell index has a high concentration of companies in industries such as finance and manufacturing, which stand to benefit from increased stimulus measures.  

Bottom line: While Democrats will likely try to bring more regulation to the financial sector, major bank stocks actually reacted positively to the news out of Georgia. The calming prospect of additional capital being injected into the economy led to a 7.9% gain in the Nasdaq Bank Index.

WHAT ELSE IS BREWING

• The New York Stock Exchange decided to move ahead with its plan to delist three Chinese telecom companies, a reversal of a reversal from its previous decision.
• Joe Biden will reportedly nominate Merrick Garland as his attorney general. You’ve definitely heard that name before, because Garland was former President Obama’s pick to serve on the Supreme Court...before his nomination was blocked by the Senate.
• New York Gov. Andrew Cuomo announced his support for the legalization of mobile sports betting in the state. 
• Gaming company Roblox raised $520 million at a $29.5 billion valuation. It plans to go public soon via direct listing. 
• Neil Young sold a 50% stake in his catalog to investment firm Hipgnosis Songs Fund, becoming the latest artist to cash in on a prolific songwriting career.

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GAMES

Hitting pause on the Games section today given what transpired. We'll be back with a puzzle tomorrow. 

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