Democratic Donors Circle the Wagons

Donors still on edge

The shock waves from last week’s presidential debate are still reverberating, as President Biden and his aides sought to allay concerns from despondent Democrats and wealthy donors about his age and fitness for office.

Donors are increasingly becoming reconciled to Biden remaining the Democratic nominee even after Biden’s disastrous performance. But some in the party, and in the markets, are increasingly expecting Donald Trump to win in November.

Here’s the latest fallout from the debate. Seventy-two percent of registered voters don’t believe Biden has the mental and cognitive health to serve as president, according to a CBS News poll published Sunday, compared with 65 percent in early June.

With the odds for a Trump win rising after the debate, Wall Street analysts are recalculating what that could mean for the economy and the markets. Among their forecasts are a slowdown in growth and resurgence in inflation that could muddle the Fed’s interest rate policy, especially if Trump carries out his proposals for mass deportation of undocumented migrants and higher tariffs.

Some attendees at recent Biden fund-raisers did damage control. “I just saw President Biden. Relax every one, he was on his game,” the Democratic donor Michael Kempner posted on Instagram following an event in the Hamptons hosted by the hedge fund mogul Barry Rosenstein. Others at the event included the Loews C.E.O. Jonathan Tisch and the radio host Howard Stern.

Biden also appeared at a fund-raising event hosted by Gov. Phil Murphy, Democrat of New Jersey, that raised $3.7 million.

Not everyone who saw Biden up close felt relieved. Anthony Scaramucci, the investor and onetime Trump communications director who attended the Hamptons event, posted on X that while Biden “did quite well reading the teleprompter” and meeting with people, “that is not going to be enough to prove to the American people that he’s up for another 4 years.”

What will donors do? Several told DealBook that they would continue to support Biden, who they increasingly believe won’t drop out. (That said, some, like the personal injury lawyer John Morgan, blamed Biden aides by name for Thursday’s debate.)

Others expect that Wall Street money will dry up. The investor Whitney Tilson posted on X that he would “fight to my dying breath to stop Trump and his toxic Trumpism,” but Biden needed to prove that his performance in the debate was an aberration. If he doesn’t, it “would be a waste of my time and money to support him because he has almost no chance of beating Trump.”

How much will Wall Street’s money matter? A Biden campaign official announced on Sunday that, of the $33 million raised since the debate, $26 million came from small-ticket donors. That might fit into the campaign’s effort to portray the election as Main Street versus Wall Street. Officials might also be quietly betting that donor recalcitrance is the stuff of momentary panic or a bluff.

But as Trump’s fund-raising picks up, including from wealthy donors, the loss of any major source of money matters.

One thing to watch: a call for Biden’s national finance committee with Jen O’Malley Dillon, the campaign chair. The discussion, scheduled for 5:30 p.m. Eastern, could be critical for calming nerves and keeping supporters on board.

HERE’S WHAT’S HAPPENING

The European Union hits Meta with antitrust charges. The bloc’s competition enforcers said that the technology giant’s “pay or consent” data policy, which allows Instagram and Facebook users to pay for ad-free versions of the social networks, violated its Digital Markets Act. Last week, the E.U. brought a similar case against Apple as it expands its crackdown on Big Tech.

European stocks and the euro rise after preliminary French election results. Though Marine Le Pen’s hard-right National Rally dominated the first round of France’s parliamentary elections on Sunday, exit polling suggests it will fall short of an absolute majority. That might help avert a situation that analysts said might destabilize the eurozone’s second-largest economy.

States split on how to police gun purchases. Starting Monday, California will require credit card networks including Visa and Mastercard to provide banks with special retailer codes to better track firearm sales. But new laws in Georgia and Tennessee will do the opposite, barring the use of such designations. The dueling approaches further complicate efforts to crack down on illegal gun sales, a week after the U.S. surgeon general, Vivek Murthy, declared gun violence a national health crisis.

Disney claims the first billion-dollar movie of 2024. The studio’s “Inside Out 2” became the first title since “Barbie” to cross the 10-digit barrier. It represents some validation for Disney, which faced criticism about its box-office performance from the activist investor Nelson Peltz. (In less positive news, “Horizon: An American Saga — Chapter 1,” a $130 million movie from Kevin Costner, was on pace to gross just $11 million.)

A Supreme Court “revolution” on regulation

For the conservatives and business groups that have been challenging the power of the federal government before the Supreme Court, it’s been a good few weeks.

A series of decisions have weakened the executive branch’s power, culminating in a ruling to overturn the so-called Chevron doctrine that could fundamentally change how federal agencies regulate industry.

The justices upended a Reagan-era precedent that underpinned thousands of regulations. A 1984 Supreme Court ruling on a dispute involved Chevron and the Clean Air Act gave agencies leeway to interpret ambiguously written laws.

But critics have long argued that it put too much power in the hands of the executive branch.

The Supreme Court agreed. On Friday, in a 6-3 ruling along ideological lines, the justices overturned Chevron and handed authority back to Congress and the courts. “Courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority,” Chief Justice John Roberts wrote.

The ruling is the latest Supreme Court decision to weaken regulators. In recent weeks alone, the justices curbed the S.E.C.’s authority to use in-house tribunals to rule on fraud cases, struck down an E.P.A. rule to control pollution and blocked the Biden administration’s virus mandate for big employers.

But the Chevron ruling could have the biggest impact. The decision could spur new challenges to rules issued by the E.P.A., labor agencies, the F.D.A., the Treasury and I.R.S., and change how presidents and Congress make policy.

Corporate lobbyists are already gearing up after the Chevron ruling, The Washington Post reports. “This means that agencies are going to have a hard time defending their legal positions,” Daryl Joseffer, the executive vice president and chief counsel at the U.S. Chamber of Commerce, told The Post. “That means it will be easier to challenge some regulations than it used to be.”

Some may even push further, arguing that the U.S. Constitution doesn’t permit Congress to delegate any of its legislative powers.

Conservative courts may be emboldened. Noah Feldman, a Harvard law professor and Bloomberg Opinion columnist, says it’s notable that Roberts wrote the opinion. He adds that it signals a “watershed moment” in the conservative legal movement as the Supreme Court has shifted to the right.

“Chevron was a doctrine inaugurated by Supreme Court justices four decades ago,” he said. “It has now died at the hands of very different justices. This is what a revolution looks like.”

Boeing’s busy weekend of deal-making

Boeing has agreed to reunite with Spirit AeroSystems, the supplier it spun off nearly two decades ago. The $4.7 billion deal comes as federal officials offered Boeing a settlement proposal that would avoid a criminal trial over a fraud charge related to plane crashes in 2018 and 2019.

The Spirit deal is Boeing’s latest effort to convince regulators and investors that it has a turnaround plan. It reverses a decades-long effort by Boeing on the use of independent component makers to cut costs. Spirit, which was spun out during that period, now makes parts for Airbus and Lockheed Martin as well as its former parent.

Quality-control concerns have dogged Boeing for years, particularly after the 2018 and 2019 crashes and the January blowout of a door panel on an Alaska Airlines flight. (Spirit made the affected panel on the Alaska Airlines flight, though Boeing was responsible for installing the part.) Its shares have fallen about 30 percent since January.

Dave Calhoun, Boeing’s C.E.O., said that by reintegrating Spirit his company could “fully align” production and safety systems under a single work force.

Boeing is also weighing the settlement offer from the Justice Department. According to the terms of the proposal, the company would pay a $244 million fine, promise to reinvest in safety improvements and agree to three years of external monitoring.

Families of those who died in the 2018 and 2019 crashes are objecting, however. Paul Cassell, a lawyer representing them, called the offer a “sweetheart plea deal” because it would not force Boeing to admit fault.

The week ahead

Elections, central bankers and jobs data will draw plenty of attention this week. Here’s what to watch.

Tuesday: Jay Powell, the Fed chair, and Christine Lagarde, the European Central Bank president, are set to speak at the annual central bankers forum in Sintra, Portugal. Their takes on inflation and growth will likely be in focus. Meanwhile, Tesla is expected to report its latest quarterly delivery numbers, a key reading on the state of the electric vehicle sector.

Wednesday: Minutes from the Fed’s June policy meeting are scheduled for publication, as investors ponder when — or if — the central bank will cut interest rates before Election Day.

Thursday: Voters in Britain head to the polls for a general election that could see an end to the Conservative Party’s 14-year governance. In the U.S., markets are closed for Independence Day.

Friday: After last Friday’s tepid inflation report, Wall Street expects to see a similar cool-down in the labor market. The June jobs report is forecast to show that employers created 190,000 jobs, down from 272,000 in May, and that wage growth slowed.

THE SPEED READ

Deals

• BlackRock agreed to buy the markets data provider Preqin for $3.2 billion, another bet on booming private capital markets. (Reuters)

• “Wall Street Law Firms Are in a Poaching Frenzy. Kind of Like the N.B.A.” (NYT)

Elections, politics and policy

Best of the rest

• Robert Kraft has donated $1 million to Yeshiva University after pulling his support for Columbia following months of campus protests over the Israel-Gaza war at his alma mater. (Business Insider)

• “Behind Davos, Claims of a Toxic Workplace” (WSJ)

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