Business

➚ BUY: Rocks. Canadian miner Teck looks ready to engage with a hostile bid from Glencore. Yesterday it postponed a shareholder vote that would have restructured the company in an effort to avoid a takeover. “Dealmaking is the new digging,” The Economist writes. The past six months have seen Rio Tinto and BHP ink big deals, and the world’s largest gold miner, Newmont, is pursuing a $20 billion takeover of a rival.

➘ SELL: Hard place. New data out today showed the Federal Reserve’s worst-of-both-worlds conundrum. Core inflation picked up and new weekly unemployment claims dropped, showing an economy that’s still running hot. But GDP growth slowed to an anemic 1.1% in the first quarter. That’s not recession territory yet, but the runway is getting short.

The earnings outperformance, over Wall Street’s expectations, for the 234 members of the S&P 500 that have reported quarterly results so far, according to Refinitiv. Beating estimates is the norm — it’s called “earnings management” and involves a whole bag of operational and accounting tricks — but the average margin since 1994 is just 4.1%. It’s another confusing indicator in an economy full of them.

Wall Street presidential donors keep changing their mind

THE NEWS

A potential rematch between Joe Biden and Donald Trump has energized Wall Street’s Democratic donors, some of whom are set to meet the president Friday in Washington to hear about his reelection campaign.

Others who were invited but unable to attend said organizers were relieved because they had already received so many RSVPs. One attendee told Semafor he planned to cut a $50,000 check on the spot, and another who couldn’t be there said he would make a sizable donation anyway.

Biden’s popularity with Wall Street Democrats waned as his appointees in antitrust and securities regulation cracked down. Some donors hoped Florida Gov. Ron DeSantis would become more of a centrist, but his fight with Disney has disappointed them. And now that a showdown with Trump appears likely, they are coming back.

Republican donors, including some who had initially backed DeSantis, are recalibrating in light of Trump’s surge in recent polls. Reuters also reported that tech billionaire Peter Thiel, who gave Trump $1.25 million in 2016 and was active in the 2022 midterms, plans to sit out the 2024 election.

KNOW MORE

Wall Street donors are also watching two other possible candidates, Virginia Governor Glenn Youngkin, a former co-CEO of the Carlyle Group, and ex-New Jersey Governor Chris Christie. Youngkin, who had paused his consideration of a 2024 presidential run, picked up one of DeSantis’s ex-supporters in Peterffy, who gave $1 million to Youngkin’s PAC, according to Politico. One Democratic donor on Wall Street said a Youngkin campaign could cut into Biden’s fundraising haul.

Christie, meanwhile, said at a recent Semafor event he’s strongly considering getting into the GOP primary race. He lost to Trump in the 2016 primary, and counts billionaire hedge-fund founder Steve Cohen as a friend and past supporter.

BRADLEY’S VIEW

Call it the Trump effect. When I spoke with Wall Street supporters of the sitting president last month, there was little urgency and a fair amount of DeSantis curiosity.

But the Florida governor’s relentless focus on culture-war issues — notably, his escalating fight with Disney — has turned off moderate New Yorkers. And Trump’s steady rise in polls gives Biden’s Wall Street bundlers a bogeyman to solicit money.

As one Biden fundraiser told me, he was impressed with the number of people in his orbit who “stepped up” in 2020, writing checks for tens of thousands of dollars when they’d mostly sat on the sidelines in years past. The unifier was Trump and that gives the Biden campaign a roadmap for another huge warchest for 2024.

ROOM FOR DISAGREEMENT

The money may not matter. When Trump defeated Hillary Clinton in 2016, he was outraised two-to-one by the former Secretary of State, whose campaign and affiliated PACs brought in close to $90 million from bankers and investment managers, according to OpenSecrets.

Trump succeeded despite the money disadvantage, in part, because of Clinton’s unpopularity as a candidate. Biden, while regaining his touch with donors, is also not a favorite of voters — 70% of respondents in a recent NBC poll said he shouldn’t run again for president.

NOTABLE

• Trump picked up an endorsement from Steve Daines, the Republican senator from Montana leading the GOP’s Senate strategy in 2024 who is also close to large donors.

A U.S. housing market slowed by higher interest rates has let builders catch up on a construction backlog. The supply of completed homes for sale has more than doubled in the past year.

And homebuilders have finished more houses than they’ve started for each of the past five months. That’s the longest streak since 2010, when the housing market was limping out of the mortgage meltdown.

My boss, Ben Smith, details the inside story of two online media rivals, Jonah Peretti of HuffPost and BuzzFeed and Nick Denton of Gawker Media, whose delirious pursuit of attention at scale helped release the dark forces that would overtake the internet and American society. I read it, it’s great, and you can pre-order it here.

And read an excerpt about Buzzfeed’s fateful decision — backed by Ben — to turn down a Disney acquisition in 2013, as well as his account of his decision to publish the Trump-Russia dossier in 2017.

Alignment Growth closed its first fund on Thursday, raising $360 million to invest in media, entertainment, and gaming.

Led by former Warner Bros. CEO Kevin Tsujihara, ex-Time Warner CEO Jeff Bewkes, and UBS’s former top media banker Alex Iosilevich, the firm has already invested in Crunchbase, the tech-industry database, and film producer Spyglass.

The Federal Reserve will release its report tomorrow on what went wrong at Silicon Valley Bank. While the problems at the lender — shoddy risk management, an abundance of uninsured deposits, a distinctly Silicon Valley hubris — have been well documented, oversight failures are murkier. We’ll be looking at how blame is apportioned between bank regulators, who set the rules, and supervisors, who were supposed to enforce them.

Lina Khan is not backing down. Speaking at a legal conference in San Francisco, the Federal Trade Commission chair reiterated an enforcement agenda that goes well beyond protecting consumers to tackle practices deemed unfair or unsafe. She doubled down on worker protections like the agency’s proposed ban on non-compete agreements, and said concentration in cloud computing, which is dominated by Amazon, Google, and Microsoft, “could lead to concerns around systemic resiliency.”

In her two years on the job, Khan has expanded the purview of the FTC, which historically focused on things like price-gouging and collusion that hurt consumers. Under her vision, megamergers might lower prices but hurt workers, and Big Tech’s power gave us free email but squeezed advertisers.

Khan Zoomed in — a planned in-person appearance was scuttled by a House hearing, scheduled for today, where she’ll defend the 40% budget increase the FTC is seeking — and wasn’t asked any especially tough questions by her former professor at Berkeley Law. But she struck a combative tone, referring repeatedly to “illegal mergers” and scaring the hell out of the corporate lawyers and bankers in the room. (In its latest crackdown, the FTC sued to block Microsoft’s $69 billion deal for Activision)

Notable: here’s an op-ed by former SEC Chairman Jay Clayton and ex-NEC director Gary Cohn, both veterans of Wall Street and the Trump administration, criticizing Democrats for “outsourcing U.S. regulatory policy to Europe.”

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— Liz and Bradley