“Try and fail, but don’t fail to try.”
- John Quincy Adams
FINAL VEEP VETTING: Donald Trump is wrapping up the vetting process for the bottom half of the Republican ticket and members of his family are heavily involved in the final screening; IN Governor Mike Pence, AL Senator Jeff Sessions, and former House Speaker Newt Gingrich sat down for last minute meetings with the Trump family, while NJ Governor Chris Christie traveled side by side with Trump earlier in the week. Trump’s focus has been on political experience - Christie fits that bill as well as that of “attack dog” and is said to be Trump’s favorite given his early support, but the family and many anxious conservatives believe Pence is the better option. We’ll all be glued to his presser tomorrow morning...
SHORING UP HER SENATE SUPPORT: Hillary Clinton heads to Capitol Hill to meet with Senate Democrats just hours before they skip town for the summer recess. Unlike their Republican brethren across the aisle, many members of the caucus will have outsized roles at the Democratic convention and throughout the election and Clinton is looking to shore up and rally the troops coming off one of her worst weeks yet. Clinton will then cross the Potomac to hit the campaign trail in the Old Dominion with veep shortlister and Senator Tim Kaine in that battleground state.
ZILCH FOR ZIKA?: True to form this year, the House plans to leave town earlier than expected to start their summer recess - but not so fast for the other side of the Capitol as a last minute push for Zika funding is expected to be considered. Senate Majority Leader Mitch McConnell has reiterated Republican’s take-it-or-leave-it offer on the House-passed package and continues to emphasize that he has held the same line in private conversations with the Administration. The calculated move backs Senate Democrats into a corner with the House’s departure, ensuring nothing more can be added or removed. We don’t expect the bill to move given President Obama’s veto threats and leaving more unfinished business for September.
WALL STREET SHIVERS: The increasingly progressive Democratic platform provides language for “a financial transaction tax on Wall Street” – but Clinton isn’t focused on big banks, shifting her attention instead to taxing high-frequency traders who spam markets with orders they later cancel. Remember, platforms have no formal holds on candidates, but do reflect the general direction they plan to follow. The inference gives another nod to Sanders, who wants a broader tax on financial transactions. Though it remains little more than a talking point for now, it could gain momentum throughout future policy discussions, as a similar idea was floated in the House a few years ago.
RISING RISK ACROSS THE POND: As Euro-area financial markets continue swooning over Italian bank bailout hopes, keep a close eye on credit default swaps. Post-Brexit, credit default swaps for some of Europe’s largest financial institutions remain elevated versus where they were at the start of this year. Look no further than Unicredit CDS, +43.4% year-to-date; Aviva PLC, +59.6%; Deutsche Bank: +139.9%. Incidentally, one of our top three 3Q16 Macro Themes is #EuropeImploding. The situation in Europe promises to get more interesting in the months ahead.