Whatever you are, be a good one.
- Abraham Lincoln
ALL THE RIGHT MOVES: Donald Trump is back on Hillary Clinton’s heels and rallied the faithful delivering an anti-globalization speech in the highly contested rustbelt region. Trump aptly chose a former steel town in western PA for another prepared speech - trashing Republican-backed (and formerly Clinton) at policies promoting free trade (NAFTA, TPP, China), while highlighting the need for an economic renaissance. In the most detailed economic address he has given to date, Trump slammed Clinton for her insider mentality and for rigging the system, and lamented the downturn working-class families have experienced given the decline in American manufacturing. His shift towards a policy speech has all the right moves, but will a change in style win over a divergence in substance?
MIGHT WANT TO CALL THE ORKIN MAN: Poison pills attached to a major funding bill have exterminated any chance for Congress to address the Zika threat; Senate Democrats zapped a $1.1 billion Zika package, claiming the bill did not provide enough research spending and included politically motivated Planned Parenthood language. Congress will now be unable to address the Zika threat for weeks as the upcoming recess is a day away. The House-passed funding package, which was attached to a funding bill for veterans and military construction programs, was under negotiation by House and Senate Republicans after being abandoned by Democrats earlier in the month. The threat of Zika is a clear and present danger (as are House and Senate seats) - chalk up Zika funding as another contentious issue for election season.
YOU’RE HIRED: Trump’s presidential campaign continues to surprise as he takes integral steps - baby ones - in the right direction. Trump’s campaign announced a handful of new hires in its communications operations as he aggressively tries to match the first-rate team backing Clinton. Better late than never - and more hires are expected to be announced soon - including state directors, surrogates, speech writers and convention advisors. With Cleveland fast approaching, the unconventional Trump has been hard-pressed by Republicans to move towards a more conventional campaign - we’ll see if these veteran hires put the Trump train back on track.
SOS PUERTO RICO: Help is just days away - Senate Majority Leader Mitch McConnell quickly pumped the life raft with air as he looks to schedule final passage of the Puerto Rico debt assistance bill ahead of the July 4th recess. McConnell is set to move the House-passed measure, setting up a procedural vote as early as this morning. Though Puerto Rico is on the brim of defaulting on a $2 billion payment due Friday, Senate Democrats are demanding changes to the measure and NJ Senator Robert Menendez is looking to offer two amendments or place a hold on the bill even if it means blowing past the deadline. But, it’s unlikely that Menendez will get that opportunity as amendments face rough waters now that McConnell has filled the amendment raft - leaving no room for Menendez on board.
BENGHAZI BLAME: Republicans delivered the final Benghazi Committee report that criticized the Obama Administration's handling of the 2012 terrorist attack, while Clinton's campaign continues to classify the findings as discredited conspiracy theories. Either way, there are no new significant revelations about the role played by Clinton. So what’s all the fuss about? The 800-page report is concerning - yet somewhat vanilla - but it's sure to add fuel to the Republican fire throughout the election as they blame Clinton for security lapses leading to the tragic event.
GLOBAL MARKET CARNAGE: A grand total of $2.08 trillion was wiped out of global equity markets on Friday following the UK’s market-shocking vote to leave the EU. It was the biggest single day loss ever. In dollar terms, the huge decline surpassed the day Lehman Brothers went belly-up and 1987’s “Black Monday” crash. While the S&P 500 plunged -3.6% on that historic day, our favorite Macro positions, Utilities (XLU), Long Bonds (TLT), and Gold (GLD), were up +0.6%, +2.7% and +4.9% respectively, extending an already impressive year of double-digit gains in a difficult, down tape. We remain uber cautious on global markets and economy.
HOME HEALTH PAYMENT UPDATE TAKES 1% REDUCTION - MORE CHANGES ON THE WAY: Our Healthcare Policy Advisor Emily Evans shared her insight on CMS’ reimbursement news and it’s expanded discussion of an alternate payment model. You can read her piece here.
