A billion-dollar hit to Big Pharma
That didn’t take long. Shares in big vaccine producers, including Pfizer and Moderna, tumbled soon after Donald Trump named Robert F. Kennedy Jr. as his choice to lead the Department of Health and Human Services.
Picking Kennedy, long a polarizing figure in the worlds of public health and food policy, underscored the president-elect’s desire to disrupt Washington with highly unconventional cabinet picks. Whether Kennedy — or Matt Gaetz, Pete Hegseth or Tulsi Gabbard, for that matter — can get Senate confirmation is another question.
The choice suggests that Trump wants to drastically overhaul U.S. public health policy. Kennedy’s divisive views — including skepticism about vaccines, pesticides and water fluoridation — are well known. (As is his sowing of misinformation.) But he has now been picked to lead a huge department with 80,000 employees, whose regulations affect America’s food and medicine choices.
Kennedy provided crucial political support for Trump during the campaign, so it seemed likely that he would get significant influence. Trump is seeking to give him real power to, in the president-elect’s words, help “ensure that everybody will be protected from harmful chemicals, pollutants, pesticides, pharmaceutical products, and food additives.”
How far will Kennedy go? In his own comments, he said he wanted to “clean up corruption, stop the revolving door between industry and government, and return our health agencies to their rich tradition of gold-standard, evidence-based science.” He has already suggested he would fire agency employees.
Though he’s perhaps best known for his vaccine skepticism, Kennedy last week told NPR that “we’re not going to take vaccines away from anybody.”
That hasn’t reassured investors in vaccine makers, who lost more than $8 billion in market value on Thursday. Shares in Pfizer fell 2 percent; Moderna 5.6 percent; and BioNTech and Novavax by 7 percent.
Axios’s Dan Primack also noted that investors in biotech companies were probably feeling anxious as well.
The Kennedy pick further underscores tension over the cabinet approval process. Trump has now chosen several candidates who are likely to meet skepticism in the Senate, which is constitutionally empowered to weigh in on some senior government positions.
But Trump wants to use a potential legal loophole to bypass the Senate and appoint his cabinet via recess appointments, something that has happened only rarely. Senator John Thune, the Republican newly elected majority leader, said on Thursday that while he prefers using “the regular process” for vetting cabinet picks, there are procedures in place for recess appointments.
HERE’S WHAT’S HAPPENING
New York City revives its congestion pricing plan. City and state officials struck a deal to charge most drivers $9 a day to enter Midtown and Lower Manhattan, less than an earlier proposal that was derailed by a political fight. If the new one is approved, New York would become the first American city to adopt a scheme of this kind, though President-elect Donald Trump has strongly opposed such a plan.
Tech giants face more heat from regulators. The European Union fined Meta roughly $840 million on Thursday for breaking competition laws with Facebook Marketplace, with officials accusing the company of boxing out rivals by bundling the sales platform into its wider social network. (Meta will appeal.) Separately, the F.T.C. plans to investigate whether Microsoft was imposing onerous licensing terms in its market-dominating product software to lock customers into its Azure cloud computing platform, according to The Financial Times.
The Biden administration finalizes a funding deal for TSMC. In agreeing to give up to $6.6 billion in grants to the Taiwanese chip-making giant, the White House sought to cement aspects of its plan to bolster domestic semiconductor manufacturing before Trump takes over. The president-elect has criticized President Biden’s CHIPS and Science Act, though some policy experts say he’s unlikely to gut the initiative altogether.
Trump names more nominees
President-elect Donald Trump’s rapid-fire announcements of his picks for cabinet nominations are spurring more controversy and questions.
A constitutional clash could loom over the choice of Matt Gaetz to preside over the Justice Department. Lawmakers from both parties demanded that the results of a House investigation into accusations of sexual misconduct and other charges by the former Florida representative be released.
Representative Michael Guest, the Mississippi Republican who leads the House Ethics Committee, suggested that he didn’t plan to release the report given that Gaetz had resigned. But Senator John Cornyn, Republican of Texas, who said he “wants to see everything” when considering nominees, suggested that the upper chamber could still subpoena the report.
This could be a moot point if Trump gets his wish for recess appointments. Otherwise, Gaetz’s nomination may be a long shot, with Republican opposition in the Senate mounting.
The Times’s Maggie Haberman and Jonathan Swan have details on how the Gaetz pick came about. It happened abruptly, over a roughly two-hour flight back from Washington on Trump’s jet; Gaetz and Elon Musk were present.
Here are other significant moves:
Todd Blanche, a former prosecutor in Manhattan who has defended Trump against multiple indictments, was tapped to be deputy attorney general.
Jay Clayton, who led the S.E.C. in Trump’s first term, was picked to be the chief federal prosecutor for the Southern District of New York, a powerful prosecutorial role with jurisdiction over Wall Street and other major businesses.
Gov. Doug Burgum of North Dakota, a former software executive who is highly regarded by the oil industry, was chosen for interior secretary.
One person who didn’t make the cut was Jamie Dimon, the JPMorgan Chase C.E.O. It’s unclear for which role he was considered, though he was speculated as a potential Treasury secretary. Dimon’s response: “I just want to tell the president also, I haven’t had a boss in 25 years and I’m not about ready to start.”
Powell’s turn on interest rates
Stocks look set to extend their losing streak to a fourth day as inflation concerns overtake Trump-trade euphoria. One question is driving the uncertainty: Will Trumponomics force the Fed to dial back interest rate cuts?
Jay Powell suggests that it is a distinct possibility. The Fed chair delivered his most hawkish assessment in months on Thursday, saying that the economy was “not sending any signals that we need to be in a hurry to lower rates.” That’s a stark change in tone from his “time-has-come-for-policy-to-adjust” speech in August.
The S&P 500 closed lower after Powell’s comments. And the futures market this morning had lowered the odds for a December rate cut to roughly 60 percent.
“We still expect the Fed to cut rates by 25bp in December, but the outlook beyond that is increasingly uncertain,” Stephen Juneau, an economist at Bank of America, wrote in a research note on Thursday.
The bond and currency markets have been flashing warning signs for weeks. The concern is that President-elect Donald Trump’s economic vision to stimulate growth through tariffs, lower taxes and less red tape could reignite inflation and add trillions to the deficit. Economic data out on Thursday underscored that worry, showing inflation largely stuck.
Powell said that the Fed was “committed to finishing the job” of bringing inflation down to its preferred 2 percent level. Wall Street economists say the central bank would need to hold rates higher for longer to do so. Will Trump, who has repeatedly expressed his preference for lower rates, stand in the Fed’s way?
Trump has used high inflation to attack the Biden administration’s economic record. He argues that a mix of tariffs, tax cuts, greenlighting oil exploration and a crackdown on immigration will bring down inflation and bolster growth. Several economists and analysts are skeptical that this will work.
The economic reality is proving tricky. Trump is inheriting an environment where inflation might not go away so quickly, Jamie Dimon, the C.E.O. of JPMorgan Chase, said on Thursday at the APEC C.E.O. Summit in Peru. Powell, for one, seems to have gotten the message.
Up next: Friday’s retail sales data could hold more clues about the path of inflation.
“We thought this would be a hilarious joke.”
— Ben Collins, the C.E.O. of The Onion’s parent company, on the satirical publication’s deal to buy Alex Jones’s Infowars out of bankruptcy and turn it into a parody of itself. But the judge overseeing the bankruptcy case temporarily halted the sale, raising questions about how it was struck.
Elon Musk, diplomat?
Elon Musk’s role in President-elect Donald Trump’s transition is seemingly expanding by the day. His latest task: would-be international peacemaker.
Musk met with Iran’s ambassador to the United Nations to discuss how to defuse tensions between Washington and Tehran, The Times’s Farnaz Fassihi reports. The meeting took place in a secret location in New York on Monday.
Iranian officials described the meeting to The Times as “good news,” potentially ratcheting down tensions between the two nations as many fear widening conflict in the Middle East. (Separately, Iran gave the Biden administration written assurances last month that it wouldn’t seek to assassinate Trump, The Wall Street Journal reports.)
More signs are emerging of how Musk may stand to benefit from Trump’s policies, beyond the billionaire’s potential power over government agencies that oversee his business empire. The latest news: Trump officials plan to end the Biden administration’s $7,500 tax credit for electric vehicle purchases as part of a broader tax overhaul, according to Reuters.
The news sent shares in Tesla down 6 percent on Thursday — but rivals fared far worse. Rivian’s stock fell 14 percent. Musk told analysts in July that ending E.V. subsidies would “probably actually helps Tesla” in the long term by making it harder for competitors and legacy carmakers to catch up. (Shares in his company are up 28 percent since the election.)
The E.V. credit plan raises more concerns about Musk’s conflicts of interest. Skeptics have already noted that the panel that Musk will help lead in cutting government spending could give him a huge say over regulators.
In other news: Musk added Microsoft and the investor Reid Hoffman, a Microsoft director and Trump critic, to his lawsuit against OpenAI. And tech leaders have pushed Musk and transition officials to appoint allies to senior roles, including Emil Michael, the former Uber executive, as transportation secretary.
THE SPEED READ
Deals
The Japanese owner of 7-Eleven is said to be considering a plan to take itself private for about $58 billion, as it fends off a takeover bid by Alimentation Couche-Tard. (Bloomberg)
“The undercover hedge funds financing activist short sellers” (FT)
Politics and policy
Gina Raimondo, the commerce secretary and former governor of Rhode Island, is reportedly considering another run for her old office. (PBS)
Joe Manchin, the departing independent senator from West Virginia, suggested that he would reverse course and vote to approve President Biden’s final judicial nominees even if they don’t get Republican support. (Axios)
Best of the rest
What Donald Trump’s podcast tour revealed about the candidate and the manosphere. (NYT)
“Want to Network in Silicon Valley? Bring a Bathing Suit.” (WSJ)
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