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First 100 Days

Biden to Use First 100 Days to Jump-start Climate Change Agenda

U.S. President Joe Biden is expected to move quickly to execute his energy and climate change agenda during his first 100 days in office, both through executive action and the launch or rollback of agency rulemakings.

The incoming president will also work closely with the Democrat-controlled U.S. Congress on climate policy as lawmakers draft further legislation to respond to the coronavirus pandemic.

President Biden has pledged to set the U.S. on the path to net-zero greenhouse gas emissions by 2050 with an interim target of decarbonizing the U.S. power sector by 2035. He is expected to use his first 100 days to start the nation down that road.

Trevor Higgins, senior fellow on the climate team of the Center for American Progress, said President Biden needs to quickly set in motion all of the transitions required to achieve his climate goals, which pose an "extraordinary challenge."

Higgins noted Biden has pledged to use "all of the levers in the federal government to accelerate the transitions that are already in motion." That said, "I don't think it's like he's going to come in and snap his fingers and suddenly something is fixed. I think what we're doing is now starting to repair the damage that the Trump administration did to our bedrock environmental laws and get back to the work of stabilizing the climate."

Biden Becomes 46th U.S. President, with Plans to Roll Back Key Trump Policies

Joe Biden was sworn in as the 46th president of the U.S. on Jan. 20, taking office with pledges to immediately reverse key parts of the Trump administration's economic agenda and to work with Congress on a new, larger pandemic relief package.

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Biden Confirmations, Green Stimulus to be Early Focuses of New Congress

Following Georgia's U.S. Senate elections, a Democrat-controlled Congress will gear up to consider President Joe Biden's nominees to lead key agencies and develop additional coronavirus relief legislation that could include clean energy provisions.

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Biden Seen Making 'Aggressive' Use of Executive Orders with Congress Gridlocked

U.S. President Joe Biden will become arguably the most powerful man in the world in January, but in America, the checks and balances the country's political system is famed for will severely restrict him.

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Economy

Within Reach: How Stimulus Proposals Lift U.S. GDP to Pre-Pandemic Levels

In S&P Global Ratings' analysis, President Joe Biden's proposed $1.9 trillion stimulus package brings U.S. GDP back to precrisis levels by second-quarter 2021, one quarter sooner than our $1 trillion base case. The boost is demand-driven and temporary, with GDP decelerating to trend growth by 2023.

Additional stimulus lowers S&P Global Ratings' estimated risk of recession over the next 12 months to 20%-25%, near the bottom of the range (from 25%-30% estimated in December). Social distancing will hamper economic activity and inflation for the duration of the virus. While price pressures will accelerate when social distancing ends, the Federal Reserve's new monetary policy framework will likely keep the Fed on hold through year-end.

Biden Signs 'Buy American' Order to Boost Federal Purchases of U.S. Goods

U.S. President Joe Biden signed a manufacturing executive order Jan. 25 that he said will boost federal purchases of U.S.-made goods, a major promise of his campaign as it attempts to tackle the economic fallout from the coronavirus pandemic.

The latest in a flurry of executive actions by Biden in his early days in office raises the domestic content threshold, or the amount of a product that must be made in the U.S., for a purchase to qualify under the "buy American" standards. Additionally, it directs an increase to the price preferences for domestic goods, or the difference in price at which point the government can buy a product from a foreign producer.

The order also establishes a director of "made in America" at the Office of Management and Budget who will oversee the order's implementation, with its pledges to close loopholes that have placed domestic producers at a disadvantage when it comes to federal purchases of goods and services. The new director would review waivers for Buy American requirements and would also establish a publicly available website to view the waivers.

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COVID-19 Stimulus

Biden's $1.9 Trillion Relief Plan Seen Accelerating U.S. Recovery, Debt Hangover

President Joe Biden's economic relief proposal would sharply expedite the U.S. economic recovery from the coronavirus, but its $1.9 trillion cost to the nation's balance sheet has economists grappling with the trade-off of short-term boost and future debt reckoning.

President Biden's plan, unveiled in a televised address late Jan. 14, includes funding for $1,400 additional one-time relief checks for those earning less than $75,000 per year, as well as an increase in the supplemental unemployment benefit to $400 per week from $300, with the benefit extended to September. The moratorium on evictions and foreclosures would also extend until September, and the plan calls for an increase of the minimum wage to $15 per hour. The proposed package also includes more than $400 billion in direct relief to address fallout from the coronavirus, including $350 billion in aid for ailing state and local governments.

Economists said the need for relief for the unemployed overrides the long-term deficit concerns of the spending package, but only for now, with the added debt burden needing to be addressed later.

"In terms of pushing the economy to pre-pandemic levels, this will certainly help achieve that even faster than predicted," said Erik Lundh, senior economist for the Conference Board, a business-funded research group. "The downside risk, however, is it renews concerns about the government debt that climbed quite rapidly over the past year. That's a longer-term concern." His latest forecast puts U.S. economic output back at pre-pandemic levels in October, but this package, if implemented, could push that milestone to mid-summer.

Biden-Backed Stimulus Checks Could Give the Retail Sector a Badly-Needed Boost

Large e-commerce players and big-box retailers stand to gain if U.S. President Joe Biden's proposed $1.9 trillion coronavirus relief package is enacted, as pandemic-weary consumers might splurge on anything from a new TV to a long-postponed vacation, retail analysts and policy experts say.

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Biden Calls for Power Bill Help, Clean Energy Loans in Pandemic Relief Plan

U.S. President Joe Biden's proposed $1.9 trillion COVID-19 relief package includes assistance for low-income households to pay their utility bills and would leverage government funds for business loans that could apply to the energy sector.

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Biden's COVID-19 Proposal Includes Billions for Cybersecurity

As part of his sweeping $1.9 trillion COVID-19 rescue package proposal, President Joe Biden would like to set aside billions of dollars to bolster U.S. cybersecurity.

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Stimulus' Renewables Directive an Early Test for U.S. Interior Under Biden

A recently enacted U.S. energy innovation package has set a bold new goal for the U.S. Interior Department: the siting and permitting of 25 GW of renewable energy projects on federal lands by 2025.

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Tax Changes

U.S. Earnings Prospects Brighten as Biden Tax Hike Recedes to Back Burner

Former President Donald Trump's corporate tax cuts may have a longer life than his successor promised, to the benefit of U.S. corporate bottom lines.

Reversing the 2017 cuts was such a priority for candidate Joe Biden that he said he would do it on his first day in office, leading to predictions of hits to corporate earnings by as much as 9%.

But in light of the worsening pandemic and narrow partisan split in Washington, economists and analysts believe that President Joe Biden may not get around to corporate tax increases in the first 100 days or even the first year of the new presidency.

Key Takeaways

  • Goldman Sachs strategists in a Jan. 8 forecast said they expect S&P 500 EPS to grow by 31% in 2021 after falling by 17% in 2020.

  • The 2021 forecast was 2 percentage points higher than they projected before Democrats took control of the Senate in the Jan. 5 runoff elections.

  • S&P 500 EPS would grow in this projection by an additional 10% in 2022, when Goldman sees tax increases going into effect, 2 percentage points lower than Goldman previously estimated for the year.

  • Goldman estimates S&P 500 EPS to grow by 6% in 2023 and 5% in 2024, unchanged from its previous forecast.

  • Corporate tax hikes, if passed by Congress, could cause S&P 500 EPS to drop by 5% to 9%, said Tom Essaye, founder of the stock analysis firm the Sevens Report, but the impact would be uneven.

Technology & Communications

New Administration Stands to Transform M&A for Big Tech

Silicon Valley's breakneck pace of growth, owing largely to acquisitions, stands to face more pushback under the new U.S. administration, analysts said.

The size and market power of some of the largest tech firms, including Facebook Inc., Apple Inc. and Google LLC-parent Alphabet Inc., already is a focal point for lawmakers and regulators globally, who in 2020 held heated congressional hearings and filed antitrust lawsuits that called for remedies from fines to divestitures.

Key Takeaways

  • Facebook in November 2020 agreed to buy customer service startup Kustomer. Though the terms of the deal were not disclosed, multiple outlets pegged the price at about $1 billion.

  • Apple in May 2020 purchased virtual-reality startup NextVR, Inc. for approximately $100 million, and in January 2020 snagged XNOR.AI Inc., a Seattle-based startup specializing in innovative artificial intelligence tools, for a reported $200 million.

  • Google also made smaller acquisitions, agreeing to buy data management firm Actifio Inc. in December 2020 for an undisclosed sum and Pointy, a retail tech company that helps merchants list their products online, reportedly for close to $163 million in January 2020.

Climate Plan

Biden Climate Order Could Shift Money Away from Overseas Gas, LNG Projects

Efforts in Europe to curtail financing of international fossil fuel infrastructure development received a substantial boost from the Biden administration's broad climate executive order rolled out Jan. 27.

A provision in the order directed U.S. treasury and energy secretaries to work with two key financing entities — the Export-Import Bank of the United States and the U.S. International Development Finance Corporation — to identify steps through which the U.S. can "promote ending international financing of carbon-intensive fossil fuel-based energy" while advancing sustainable development.

The wording does not specify the resources to be targeted, but energy market observers, oil and gas industry leaders and environmental groups all suggested the order could put international natural gas project investments at risk. If gas projects are targeted, the order could squelch nascent efforts under the Trump administration, and encouraged by LNG developers, to help spur financing of gas infrastructure and promote gas market development overseas.

The order also called for the U.S. to develop a climate finance plan, which would make use of multilateral and bilateral institutions to help flow capital "toward climate-aligned investments and away from high-carbon investments." The treasury secretary and secretary of state are tasked with submitting a plan to the president within 90 days.

U.S. LNG developers have encouraged steps such as Ex-Im credit support for potential buyers of long-term LNG contracts. During the Trump administration, there was also discussion of using the newly reconstituted U.S. International Development Finance Corp., to take an equity position in LNG and other gas projects. Former Secretary of State Mike Pompeo in 2018 announced the "Asia-EDGE" initiative, which included a $50 million investment to help Indo-Pacific partners import, store and develop energy sources.

While the Biden administration's stance on natural gas is still unfolding, a Jan. 27 comment by President Joe Biden's international envoy for climate change, John Kerry, was seen as cool to the resource by some market observers. Speaking at a virtual World Economic Forum event, Kerry warned that a large build-out of gas infrastructure now risks being "stuck with stranded assets in 10 or 20 or 30 years."

Biden's Order Seeks to Promote U.S. Clean Energy, Electric Vehicle Manufacturing

U.S. President Joe Biden issued an executive order Jan. 25 aimed at promoting U.S. manufacturing, including the domestic development of clean energy technology.

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Biden Faces Uphill Climb Making U.S. a Green Manufacturing Power

SunPower Corp.'s recent decision to close its only solar manufacturing plant in the U.S. underscores the challenges President Joe Biden faces as he tries to boost domestic production of clean energy technology, a cornerstone of the incoming administration's economic and climate strategy.

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Biden to Order Review of Trump EPA Rules as Part of Climate Focus

U.S. President Joe Biden has teed up nearly 50 U.S. Environmental Protection Agency rules for review, including major Trump-era energy- and climate-related rollbacks for power plants and the nation's transportation sector.

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'Go Really Bold': Biden Sparks Hope for Accelerated Clean Energy Transition

Governments, companies and investors around the world are at a critical crossroads in the race to eliminate global greenhouse gas emissions by midcentury in order to avert a climate catastrophe, according to Fatih Birol, executive director of the International Energy Agency.

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Outlook for Oil

Critics Warn of Ripple Effects from Biden's Planned Oil, Gas Leasing Moratorium

President Joe Biden is expected to announce a moratorium on new oil and gas leases on federal lands and waters on Jan. 27, a move that critics said would hurt U.S. production and pick winners and losers between states.

The anticipated moratorium — with no time limit — would help fulfill Biden's campaign pledges on climate change and would come one week after the acting secretary for the U.S. Department of the Interior suspended agencies' authority to issue oil and gas permits and leases for 60 days.

Biden Positioned to Shape Clean Energy Transition without Ending Oil Development

President Joe Biden will not end oil and gas development in the U.S., but his administration is poised to help shape the global clean energy transition, industry observers said.

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On Day One, Biden Blocks Keystone XL Oil Pipeline by Rescinding Permit

Fulfilling his campaign promise, President Joe Biden rescinded a key permit for the Keystone XL oil pipeline, effectively blocking the project's progress.

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Cabinet Selections

Yellen Faces Major Hurdles to Issue of 50-Year Bond that Mnuchin Passed Over

There are plenty of reasons why the U.S. Treasury has not issued a 50-year bond since 1911.

Fixed-income strategists point to limited demand, the potential to drain liquidity from other corners of the bond market, an unwanted steepening of the yield curve, and a disruption to the Treasury's long-standing "steady and predictable" bond issuance mantra.

However, after the average maturity of U.S. government debt fell dramatically in the past year amid a wave of new issuance to pay for pandemic relief, newly appointed Treasury Secretary Janet Yellen is again looking at the idea. "There is an advantage to funding the debt, especially when interest rates are very low, by issuing long-term debt," she said at her Senate Finance Committee confirmation hearing Jan. 19.

CFTC Commissioner Who Led Climate Report Effort Becomes Acting Chairman

Rostin Behnam, a Democratic commissioner who spearheaded efforts to study climate risks for financial markets, ascended to the role of acting chairman of the Commodity Futures Trading Commission by a unanimous vote of commissioners Jan. 21.

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Fauci to Address WHO as Biden Rejoins U.N. Group; Acting U.S. Health Chief Named

President Joe Biden is reengaging with the World Health Organization and has called on top U.S. infectious diseases expert Anthony Fauci to represent the nation and deliver an address on Jan. 21 at the UN's group's executive meeting.

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Wall Street Critic, Former CFTC Chairman Gary Gensler Named to Lead SEC

President Joe Biden has tapped Gary Gensler to lead the U.S. Securities and Exchange Commission, a sign of the administration's plans to take an aggressive stance on Wall Street.

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Public Health

Biden Seeks to Bolster Resilience of U.S. Medical Supply Chain in Emergencies

President Joe Biden has used the power of his pen to order federal agencies to ensure the U.S. is not reliant on foreign nations for protective equipment and essential medical products and supplies when disaster strikes.

The COVID-19 pandemic has highlighted the nation's reliance on foreign suppliers for drugs, vaccines and other medical supplies, like personal protective equipment, such as masks and gowns, and the urgency to have a stronger domestic manufacturing base after many healthcare providers found themselves unable to obtain certain products.

"We can never again be in a position where we have to rely on a foreign country that doesn't share our interest in order to protect our people during a national emergency," Biden said Jan. 25 before signing an executive order under his "Buy American" pledge.

Biden Seeks to Add 200 Million More Pfizer, Moderna Shots in COVID-19 Response

The Biden administration is seeking to buy 200 million additional doses of COVID-19 vaccines and plans to increase the weekly amount that U.S. states, tribes and territories are receiving of the products in an effort to get more shots into Americans' arms.

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Biden Eyes $400B for U.S. COVID-19 Programs, Aims to Rebuild Public Health

President Joe Biden plans to ask Congress for $400 billion to beef up the U.S. response to the COVID-19 pandemic, with $20 billion of those funds intended to help vaccinate the nation.

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Social Equity

U.S. Miners May Get New COVID-19 Protections in Early Days of Biden Administration

In the early days of the new Biden administration, U.S. mine workers may get the additional COVID-19 protections they have sought since March 2020.

After calling on federal officials at the U.S. Mine Safety and Health Administration to issue an emergency temporary standard for workers in the early days of the pandemic, the United Mine Workers of American International Union, or UMWA, later joined with United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union to sue the agency. While the U.S. Court of Appeals for the District of Columbia Circuit sided with MSHA, which said a rule was not necessary, there are indications that the agency will take a different approach under a Biden presidency.

Biden $1.9 Trillion Relief Package Calls for Worker Safety, Paid Leave Reforms

President Joe Biden's $1.9 trillion economic relief package includes proposals to bolster safety regulations for workers and expand the amount of paid sick, family and medical leave workers can receive.

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Biden's Push for a Minimum Wage Hike Could Prompt Bidding War at Retail

President Joe Biden is pushing for a minimum wage hike that could ignite a bidding war over retail workers as major companies like Amazon.com Inc. have already bolstered their compensation and wield wage-setting power, according to policy and labor experts.

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In an era of unprecedented events, the 2020 U.S. Presidential election was like no other. Access our latest coverage on the policy, politics, and decision-making at play under the Biden Administration.

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Tariffs

Biden Tariff Decisions Seen Subordinate to Overarching Policy Goals

The Biden administration's direction on trade, including tariffs affecting the energy sector, is likely to be driven by the administration's broader domestic or foreign policy objectives, a panel of Washington trade lawyers and experts said Jan. 11.

Speaking during a webinar held by Bracewell, the participants did not predict a rapid unwinding of tariffs on China imposed under Section 301 of the Trade Act of 1974. Chinese retaliatory tariffs, such as a 25% tariff on US LNG imports into China, have been viewed as slowing long-term contracts to support a new wave of US LNG export terminals.

"It's about sorting out what the highest priority issues are for the incoming administration and how these trade policies serve those objectives," said Bracewell Senior Principal Josh Zive. "If the current tariffs are consistent with those Biden objectives, it's going to be harder to get rid of them; if they are at odds, easier."

Biden to Move Carefully on Tariffs on Energy Trade, Supplies – Attorneys

The Biden administration will take a measured approach to the U.S.-China trade relationship and will avoid yanking down tariffs that have hurt the LNG business between the two nations and affected the supply chain for the U.S. pipeline and solar industries, a panel of Washington trade lawyers and experts said Jan. 11.

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Biden's Steel Deal with Europe Faces Utilization Hurdle

The U.S. industrial recovery continued in December 2020, with capacity utilization across all industries reaching 74.5%, Panjiva's analysis of official data shows, representing the seventh straight increase from a trough of 64.2% in April, though still well below the 77.2% rate achieved a year earlier.

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Global Trade

Biden's 'Buy American' Provides a New Vehicle for Dealing with an Old Sector

President Joe Biden has published an eagerly-awaited "Buy American" Executive Order that starts to set the framework for support for the development of critical U.S. supply chains. From a practical point of view, 97% of U.S. federal contracts already go to U.S. companies, according to the U.S. Chamber of Commerce, with these regulations set to tighten tier-2 supplier rules of origin.

Details will only emerge following the creation of a "Made in America" office in the Office of Management and Budget and with the appointment of a director responsible for implementing the revised policy.

One limitation to delivering a meaningful change to a breadth of industries will be limited by many critical supply chains resting largely in private sector hands. Additionally, there is also the risk of challenges to the new policies under the World Trade Organization's Government Procurement Agreement as well as under United States-Mexico-Canada Agreement, both of which could delay implementation or raise planning uncertainties.

Biden's First Actions May Help EU Relations, Onshore Medical Supplies

U.S. President Joe Biden has signed 15 Executive Orders and two administrative actions among his first day actions. Unsurprisingly, the details of trade policy have not been a focus, though an integrated plan is expected in the coming weeks. Two actions are relevant for supply chains and fit with the president's prior commitments to the environment and bolstering the U.S. economy.

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Biden Position on Nord Stream 2 Gas Link Unchanged Amid Merkel, Putin Calls

The position of US President Joe Biden toward the controversial Nord Stream 2 gas pipeline from Russia to Germany has not changed, the White House said late Jan. 26.

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Iranian Sanctions Relief Under Biden Could Strain OPEC+ Ties: Panel

A return of Iranian oil to the market if new US President Joe Biden resurrects the nuclear deal could destabilize crude prices and undermine the OPEC+ alliance, experts said at the Atlantic Council Global Energy Forum on Jan. 20.

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