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Selling a Truck to Detroit’s Loyal Owners May Be Tesla’s Toughest Challenge Yet

(Bloomberg) -- A year before Elon Musk was ready to unveil Tesla’s first pickup model, the chief executive officer was setting a low bar for the amount of demand it will draw. Dig into the dynamics of the fiercely competitive and tough-to-crack U.S. truck market, and it’s easy to see why.Japanese automakers have spent two decades and billions of dollars trying to get in on the big pickup gravy train. But 20 years after Toyota first started making the Tundra, Detroit brands continue to crush the competition, controlling almost 92% of the half-ton truck segment, according to IHS Markit. Customers who own Ram pickups are more loyal than owners of any other model line in the U.S., the researcher says, and brand loyalty to Ford Motor Co. or General Motors Co.’s Chevrolet isn’t far behind.Late Thursday, Musk will start his ascent up arguably the toughest hill Tesla has tried to climb yet with the debut of Cybertruck. He cautioned in November of last year that he wasn’t sure if a lot of people will buy the pickup and in June said the design won’t be for everyone. The comments contrast starkly with the bold predictions the billionaire has made about how many Model 3 sedans and Model Y crossovers his company will manage to sell in the coming years.“An electric pickup truck needs to meet the needs and capabilities of current pickup trucks and deliver a little bit more,” Stephanie Brinley, an IHS Markit analyst, said by phone. “A traditional pickup-truck buyer may consider electric, but they are not going to give up on capability.”Detroit automakers aren’t waiting for Musk to take the wraps off his truck before starting to talk a little trash. Thirteen months after the Tesla boss tweeted that his pickup will boast 300,000 pounds of towing capacity, Ford released a video of an electric F-150 prototype dragging 1 million pounds of double-decker rail cars.GM CEO Mary Barra told investors at an event in New York on Thursday her company’s first electric pickup will debut in showrooms in late 2021, and it will have a leg up on the competition. “General Motors understands truck buyers,” she said. Other GM executives also are confident that Tesla’s pickup won’t be in the same league as their electric truck.“I suspect price-wise there might be some similarities, but I think in terms of size and capabilities, there might be a difference,” Phil Brook, the vice president of marketing for GM’s GMC brand, said in an interview. “People who buy our trucks, they are very proud of the fact that they’ll take their trucks anywhere, they’ll get them dirty, then they’ll wash them out and go to a five-star restaurant for dinner. So they’re not people who just drive them around and want to look good.”On a RollMusk told a Tesla enthusiast podcast earlier this year that he wants his truck to start at less than $50,000. Not all of his comments about the pickup have moderated expectations: During an October earnings call, he declared it will be the company’s “best product ever.”Tesla shares have been on a roll since that quarterly report, surging 42% on optimism the company can produce profits on a more sustainable basis. But it’s unclear how soon the new truck will contribute to those efforts. The Model Y crossover is scheduled to launch next summer, and limited production of the Semi truck is planned for next year. Toni Sacconaghi, an analyst at Sanford C. Bernstein, expects Tesla to begin building the pickup in late 2020 or early 2021.Tesla shares rose 1.2% to $356.58 as of 2:04 p.m. Thursday in New York.Tesla probably won’t have the electric-truck market to itself for long, if at all. Amazon-backed Rivian Automotive plans to launch its R1T pickup late next year. Ford has vowed to start selling hybrid-electric and battery-electric versions of the F-150 starting in 2020, and GM has committed to producing plug-in pickups at a plant it had been planning to shutter in the Detroit area.Battery prices will have to drop significantly for electric trucks to reach parity with combustion engine-powered pickups, according to Dan Levy, an analyst at Credit Suisse.“Given electrification cost constraints and customer preferences, we expect the large-truck segment will be among the last segments to see an inflection in volumes toward electrification,” Levy wrote in a report this week. He assumes Tesla will be selling about 50,000 pickups by 2025, compared with roughly 300,000 Model 3 and 400,000 Model Y.One obstacle that shouldn’t be overlooked is the tough time Tesla has had operating in truck country. Texas, which bars manufacturers from selling vehicles direct to consumers, is the top state for U.S. registrations of half-ton pickups, according to IHS. The state’s share of the nationwide total this year through September -- 14% -- is more than double the runner-up, Michigan, which also has a ban.‘Blade Runner’Tesla’s Thursday night event bookends the press days for the Los Angeles Auto Show, where Ford generated buzz with the debut of the Mustang Mach-E electric SUV. But seeking attention of his own wasn’t the only motivation for Musk to stage his truck reveal now and near the show. When announcing the date and locale, he joked on Twitter they were “strangely familiar” and shared a link to the opening credits and scene of the 1982 film “Blade Runner,” which was set in November 2019. He had referenced the movie before as inspiration for the pickup’s futuristic design.“Musk has indicated it ‘looks like an armored personnel carrier from the future,’ from the set of Blade Runner, and is ‘unrecognizable from the trucks from the past 20-40 years,’ which we think could carry the risk of not attracting traditional pickup buyers, leaving it a lower-volume niche product,” Emmanuel Rosner, a Deutsche Bank analyst, wrote in a report this week. Investors will want to know more about production timing, increased capital-spending requirements and where Tesla will build the truck, he said.Musk is scheduled to begin making remarks around 8 p.m. local time at Tesla’s design center in Hawthorne, California.(Updates with GM CEO comments from sixth paragraph)\--With assistance from Keith Naughton and Chester Dawson.To contact the reporter on this story: Dana Hull in San Francisco at dhull12@bloomberg.netTo contact the editors responsible for this story: Chester Dawson at cdawson54@bloomberg.net, Craig Trudell, Melinda GrenierFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

Trump Pledged to Help Small Farms. Aid Is Going to Big Ones

(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. Donald Trump promised he would help embattled small farmers caught in the crossfire of his trade war with China. But big farms so far have been the main beneficiaries of the billions of dollars being distributed in aid payments.Half of the Trump administration’s latest trade-war bailout for farmers went to just a 10th of recipients in the program, according to an analysis of payments by an environmental organization. The study asserted that payouts have been skewed toward larger operations and wealthier producers.The top 1% of beneficiaries from the trade aid received 13% of the money distributed in the first round of payments under this year’s Market Facilitation Program, with an average payment of more than $177,000. But the bottom 80% of recipients received an average payment of $5,136, according to the Environmental Working Group, which analyzed records obtained through the Freedom of Information Act.The analysis echoes the findings of an assessment of last year’s trade aid program that also found benefits were tilted toward large farms. That’s likely to stoke criticism of the cost of the $28 billion bailout and accusations of inequities.Senate Democrats earlier this month issued a report arguing Trump’s trade aid favors Southern farmers at the expense of their counterparts in the Midwest and Northern Plains, growers of cotton over soybeans, and large producers over smaller ones.“America’s farm safety-net is broken,” Anne Weir Schechinger, a senior analyst with Environmental Working Group, said in a statement. “Instead of helping small farmers that have been hurt by the Trump administration’s trade war, Trump’s Agriculture Department is wantonly distributing billions of taxpayer dollars to the largest and wealthiest farms.”The U.S. Department of Agriculture defended the program in a statement issued through a spokesman, saying the administration “is committed to helping all farmers, regardless of their size, deal with the economic impacts of retaliatory tariffs and unfair trading practices.”Controversy over the trade aid has grown as the scale of payments has escalated and U.S. farmers have become increasingly dependent on federal aid. The farm rescue is now more than twice as expensive as the 2009 auto industry bailout, which ultimately cost taxpayers $12 billion. Almost 40% of projected U.S. farm profits this year will come from trade aid, disaster assistance, federal subsidies and insurance payments, according to the American Farm Bureau Federation.The trade aid program came up in Wednesday’s Democratic presidential debate as moderator Rachel Maddow pressed candidate Pete Buttigieg on whether he would continue the rescue subsidies if he is elected. Buttigieg responded he would “but we won’t need them because we’re going to fix the trade war.”Farmers and rural residents are a critical Trump constituency as the president enters a re-election campaign and a fight to stave off impeachment.The Trump administration announced an additional $16 billion round of trade aid for farmers this year as the dispute with China drags on. That’s on top of a $12 billion pledge in 2018.This year’s payments are being made in three tranches. The Environmental Working Group analysis looked at payments made in the first tranche, from Aug. 19 through Oct. 31, totaling about $6 billion.At least three farms have already received more than $1 million in aid from this year’s first tranche. Smith & Sons, a cotton and sorghum farm based in Bishop, Texas, was paid $1.5 million, according to the group. Forty-five farms were paid more than $500,000.The program caps payments at $250,000 per person. But Schechinger said the limit can be skirted through partnerships that allow cousins, nieces and nephews living in distant cities to receive the aid payments.“The caps really don’t apply to very many people,” she said.Agriculture Secretary Sonny Perdue announced earlier this month the USDA would proceed with a second tranche of aid payments this year, beginning before Thanksgiving.The environmental group’s funders include individual donors, private foundations and companies, among them organic-food producers such as Stonyfield Farm and Organic Valley.(Updates with USDA response, additional details and context beginning in seventh paragraph)To contact the reporter on this story: Mike Dorning in Washington at mdorning@bloomberg.netTo contact the editors responsible for this story: Joe Sobczyk at jsobczyk@bloomberg.net, Millie Munshi, James AttwoodFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

Hill Says Envoy Was on ‘Political Errand’: Impeachment Update

(Bloomberg) -- The House Intelligence Committee impeachment inquiry into President Donald Trump is hearing Thursday from Fiona Hill, the former National Security Council director for Europe and Russia, and David Holmes, a Foreign Service officer at the U.S. Embassy in Kyiv.Here are the latest developments:Hill Says Envoy Was on ‘Political Errand’ (1:52 p.m.)Hill said she has realized that U.S. Ambassador to the European Union Gordon Sondland was on a “domestic political errand” on Ukraine while National Security Council personnel were carrying out foreign policy -- and that’s why Sondland wasn’t coordinating with them.She said she met with Sondland and a few other officials shortly before she left the NSC on July 19, and that she became angry because he wasn’t coordinating with the NSC. He told her he was briefing the president, Secretary of State Michael Pompeo and others and that he said, “Who else do I have to deal with?”She said she has since realized that “he was absolutely right because he was being involved in a domestic political errand and we were being involved in national security, foreign policy and those two things had just diverged.”“Ambassador Sondland is not wrong that he had been given a different remit than we had been,” Hill said.Burisma Was Code for Bidens, Witnesses Say (11:13 a.m.)Hill and Holmes testified there was no doubt that when Trump lawyer Rudy Giuliani and other people referred to investigations of the energy company Burisma Holdings, what they really meant was Democratic presidential contender Joe Biden and his son Hunter, who sat on its board.“It was very apparent to me that was what Rudy Giuliani intended, yes, intended to convey that Burisma was linked to the Bidens and he said this publicly, repeatedly,” Hill said.Under questioning from Democratic counsel Dan Goldman, Holmes said he agreed that Burisma was “code” for the Bidens.Two other key witnesses, Ambassador to the European Union Gordon Sondland and former special envoy to Ukraine Kurt Volker, both testified that they never made any such connection until after the rough transcript of Trump’s July 25 call with Ukraine’s president was made public.Hill Agrees Giuliani Was a ‘Hand Grenade’ (11:04 a.m.)Hill described discussing with National Security Adviser John Bolton their shared concern about Rudy Giuliani’s activities in Ukraine and also about how then-Ambassador to Ukraine Marie Yovanovitch was being smeared.Bolton called Giuliani “a hand grenade that was going to blow everybody up,” Hill said. She said she agrees with Bolton’s assessment, and that the impeachment inquiry underscores that he was correct.Giuliani “was clearly pushing forward issues and ideas that would probably come back to haunt us, and in fact I think that’s where we are today,” she said.Holmes Recalls Loud Trump Call With Sondland (10:43 a.m.)Holmes said he could hear the call between diplomat Gordon Sondland and Trump at an outdoor restaurant terrace in Kyiv because the president spoke so loudly that Sondland “winced” at least twice and pulled the phone away from his ear.Holmes reiterated that Sondland said the “Biden investigation” was what Trump was interested in, contradicting Sondland’s testimony a day earlier that he didn’t recall bringing Biden’s name into their conversation.Holmes also discussed his general disbelief over the call.“I’ve never seen anything like this in my foreign service career,” he said of Sondland’s call with the president over a non-secure phone that even he could overhear, as well as the colorful language over a highly sensitive subject.Russia’s Goal Is Chaos in U.S., Hill Says (10:34 a.m.)Hill said the current division and chaos in U.S. politics “is exactly what the Russian government was hoping for” in meddling and trying to pit one side of the American electorate against another.Russia sought to ensure that if Hillary Clinton became president instead of Trump, she also would have faced “major questions about her legitimacy,” Hill said.During questioning by Intelligence Chairman Adam Schiff, she said the Russians are trying to deflect blame for election-meddling onto Ukraine, a former Soviet republic.“The Russians like to put a lot of blame on U.S. allies for incidents they themselves have perpetrated,” Hill said. Russians have a “vested interest” in putting Ukraine officials “in a very bad light.”Holmes testified that U.S. anti-corruption efforts were undermined by the request to Ukraine to conduct investigations sought by Trump. And even though the freeze on security aid to Ukraine was lifted, the country still didn’t get the White House meeting and other things officials needed, Holmes said.“I think they’re being very careful. They still need us now,” Holmes said.Giuliani Role Frustrated Bolton, Holmes Says (10:16 a.m.)Holmes also said that during an Aug. 27 meeting when then-National Security Advisor John Bolton was visiting Ukraine, he heard Bolton express frustration about Giuliani’s influence with Trump and also about diplomat Gordon Sondland’s “expansive” view of his mandate.Bolton made clear that he couldn’t do anything about Giuliani’s role. The national security advisor recommended that Ukraine’s new prosecutor general open a channel with U.S. Attorney General William Barr instead of the informal channel that involved Giuliani.Holmes Describes Confusion on Giuliani Role (10:03 a.m.)Holmes said that last April, as Trump’s private lawyer Rudy Giuliani began taking a direct role in Ukrainian diplomacy, at least one close aide to the incoming Ukrainian president thought Giuliani worked for Vice President Mike Pence.Holmes said Volodymyr Zelenskiy’s campaign chairman, Ivan Bakanov, said he had been contacted by “someone named Giuliani who said he was an adviser to the vice president.”The U.S. embassy aide also quoted diplomat Gordon Sondland as saying about Giuliani months later, “Dammit Rudy. Every time Rudy gets involved he goes and f---s everything up.”Holmes Describes Demands for Biden Probe (9:46 a.m.)Holmes said a “barrage” of allegations against then-U.S. Ambassador to Ukraine Marie Yovanovitch by Rudy Giuliani and others including Ukrainian officials “is unlike anything I have seen in my professional career.”Holmes said envoy William Taylor described a June 28 call with Ukraine’s president on which it was “made clear that some action on a Burisma/Biden investigation was a precondition for an Oval Office meeting.”The embassy aide’s opening statement also described a June 26 phone call he overheard between Trump and Ambassador to the European Union Gordon Sondland. Afterward, Holmes said Sondland told him “that the President did not ‘give a s--tabout Ukraine.’”Sondland said Trump cared about “‘big stuff’ that benefits the president,like the ‘Biden investigation’ that Mr. Giuliani was pushing.“ Sondland on Wednesday confirmed the broad outlines of the conversations, but said he didn’t remember mentioning Biden.Hill Says Falsehoods Serve Russian Interests (8:49 a.m.)In her advance testimony, Hill said, “Right now, Russia’s security services and their proxies have geared up to repeat their interference in the 2020 election.”“President Putin and the Russian security services operate like a Super PAC,” Hill said. “They deploy millions of dollars to weaponize our own political opposition research and false narratives.”“We are running out of time to stop them,” she said. “In the course of this investigation, I would ask that you please not promote politically driven falsehoods that so clearly advance Russian interests.”Ukraine “plays an important role” in U.S. national security, she said. “I refuse to be part of an effort to legitimize an alternate narrative that the Ukrainian government is a U.S. adversary, and that Ukraine — not Russia — attacked us in 2016.”Hill Slams ‘Fictional Narrative’ on Ukraine (8:12 a.m.)Hill, in advanced testimony Thursday, warned lawmakers against believing a “fictional narrative” that it was Ukraine and not Russia that interfered in the 2016 U.S. presidential election.“This is a fictional narrative that has been perpetrated and propagated by the Russian security services themselves,” Hill said in prepared remarks. “The unfortunate truth is that Russia was the foreign power that systematically attacked our democratic institutions in 2016. This is the public conclusion of our intelligence agencies, confirmed in bipartisan Congressional reports. It is beyond dispute, even if some of the underlying details must remain classified.”Hill emphasized that she is a nonpartisan foreign policy expert, who has served under three different Republican and Democratic presidents and that she has “no interest in advancing the outcome of your inquiry in any particular direction, except toward the truth.”She warned that U.S. national security has been harmed by the politicization of support for Ukraine. “The Russian government’s goal is to weaken our country -- to diminish America’s global role and to neutralize a perceived U.S. threat to Russian interests,” she said. “President Putin and the Russian security services aim to counter U.S. foreign policy objectives in Europe, including in Ukraine, where Moscow wishes to reassert political and economic dominance.”Hill added, “I respect the work that this Congress does in carrying out its constitutional responsibilities, including in this inquiry, and I am here to help you to the best of my ability. If the President, or anyone else, impedes or subverts the national security of the United States in order to further domestic political or personal interests, that is more than worthy of your attention. But we must not let domestic politics stop us from defending ourselves against the foreign powers who truly wish us harm.”Inquiry to Hear From Ex-Russia Adviser Hill (7 a.m.)Hill, Trump’s former Russia adviser, said during her sworn deposition in October that then-National Security Adviser John Bolton called Trump lawyer Rudy Giuliani a “hand grenade that is going to blow everyone up.”Hill also said regarding U.S. diplomat Gordon Sondland’s activities on Ukraine policy, “Some of it was comical, but it was also, for me and for others, deeply concerning.” She said Sondland “was often meeting with people he had no information about.”Holmes is the Kyiv embassy staff member who said he overheard Sondland’s phone call with Trump on July 26, the day after the president spoke with Ukraine President Volodymyr Zelenskiy.Holmes said he heard Trump ask Sondland about “the investigations” -- a reference to probes regarding former Vice President Joe Biden and the 2016 election. According to Holmes, Sondland also told Trump over the phone that Zelenskiy “loves your ass.”Catch Up on Impeachment CoverageKey EventsSenior diplomat Gordon Sondland testified Wednesday that Trump demanded a “quid pro quo” from Ukraine’s new president as a condition of a coveted White House meeting. He said Trump told him to work with Giuliani on Ukraine policy. “Everyone was in the loop” on the demand for investigations of Burisma and the 2016 election, he said, referring to a Ukrainian company that had Biden’s son on its board.The Sondland transcript is here and here; Volker’s transcript is here and here. Former U.S. Ambassador to Ukraine Marie Yovanovitch’s transcript is here and here; the transcript of Michael McKinley, former senior adviser to the secretary of State, is here. The transcript of Holmes, a Foreign Service officer in Kyiv, is here. The transcript of Hale is here. The transcript of William Taylor, the top U.S. envoy to Ukraine, is here and here. State Department official George Kent’s testimony is here and here. Testimony by Alexander Vindman can be found here, and the Fiona Hill transcript is here. Laura Cooper’s transcript is here; Christopher Anderson’s is here and Catherine Croft’s is here. Jennifer Williams’ transcript is here and Timothy Morrison’s is here.Taylor’s opening statement is here; Kent’s statement is here. Yovanovitch’s opening statement is here. Kurt Volker’s opening statement is here; Tim Morrison’s statement is here. Alexander Vindman’s statement is here. Jennifer Williams’s opening statement is here. Gordon Sondland’s opening statement is here. Laura Cooper’s opening statement is here. Fiona Hill’s statement is here.\--With assistance from Nick Wadhams.To contact the reporters on this story: Laura Litvan in Washington at llitvan@bloomberg.net;Billy House in Washington at bhouse5@bloomberg.netTo contact the editors responsible for this story: Joe Sobczyk at jsobczyk@bloomberg.net, Kathleen HunterFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

Jeffrey Gundlach Says ‘Mayor Pete Killed It’ at Democratic Debate

(Bloomberg) -- Count billionaire Jeffrey Gundlach among the finance-industry titans taking note of presidential candidate Pete Buttigieg.“Mayor Pete killed it tonight,” tweeted Gundlach, whose DoubleLine Capital oversees more than $140 billion, after Wednesday night’s Democratic debate.He joins fellow billionaire investors Paul Tudor Jones, Michael Novogratz and Blackstone Group Inc. Vice Chairman Tony James in showing support for -- or at least being impressed by -- the 37-year-old mayor of South Bend, Indiana. Novogratz, a former Goldman Sachs Group Inc. partner, has said he likes Buttigieg even if he’s skeptical he can win, and Jones, founder of Tudor Investment Corp., has called the candidate “my man.”Buttigieg, a former McKinsey & Co. consultant once considered a long-shot candidate, is the emerging front-runner in Iowa, the first caucus state, with a 7 percentage-point lead over the pack, according to RealClear Politics. He received high marks for his debate performance in Atlanta on Wednesday as scrutiny increased along with his poll numbers.A moderate candidate such as Buttigieg may prove more enticing than progressives such as Senators Elizabeth Warren and Bernie Sanders as Democratic voters seek a viable opponent to President Donald Trump in 2020, particularly among swing voters who will play a crucial role in the general election.Wall Street in particular has plenty of reason to be turned off by Democratic candidates on the far left. Sanders and Warren -- both of whom have spurned donations from private, large-dollar fundraisers -- have called for tighter bank regulations and higher taxes on the wealthy, and repeatedly attacked big financial firms and their executives, with billionaires Leon Cooperman and Lloyd Blankfein called out by name in a recent Warren campaign ad.Gundlach was among the few money managers to predict Trump’s victory in the 2016 election. These days, he frequently criticizes the president’s economic policies, such as driving up the federal deficit. Asked to elaborate on his post-debate tweet, Gundlach said it shouldn’t be read as a Buttigieg endorsement.“I have never endorsed a political candidate,” he said Thursday in an emailed statement. “I am not doing so now nor will I in the 2020 presidential race.”He has criticized the prospects for other Democratic candidates, including Warren, former Vice President Joe Biden, Senators Kamala Harris and Cory Booker, and former Massachusetts Governor Deval Patrick. Wednesday’s tweet was Gundlach’s second favorable one about Buttigieg this month, though the last was more equivocal.“Mayor Pete is very smart,” Gundlach wrote on Nov. 7. “His Hunger Games ‘let them kill each other’ strategy is perfect. Can you name a single policy Pete’s advocating?”(Updates with Gundlach comments in seventh, eighth paragraphs.)\--With assistance from Amanda Gordon and Sonali Basak.To contact the reporter on this story: John Gittelsohn in Los Angeles at johngitt@bloomberg.netTo contact the editors responsible for this story: Sam Mamudi at smamudi@bloomberg.net, Daniel Taub, Alan GoldsteinFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

Everybody Knows Biden Is Toast. Except Voters.

(Bloomberg Opinion) -- The only thing Joe Biden has had going for him in this race is Democratic primary voters.It has been months since the former vice president had the unofficial, media-awarded title of front-runner. He did not reclaim it after the Democratic candidates’ latest debate, Wednesday night in Atlanta. Big Democratic donors lack confidence in him. Pundits say that he is past his prime, that nobody is enthusiastic about him.Yet still, month after month, he leads the national polls. At the moment, his average lead is in the double digits.We have been told he might have an embarrassing finish in the first two state contests. But he is in second place in both Iowa and New Hampshire, again according to the poll averages. He has a solid lead in the next two states, Nevada and South Carolina.Biden has also been lucky in the way the competition has shaken out. Earlier in the race it appeared that Senator Kamala Harris, who hit him hard in the first debate for not supporting busing as a means of desegregating schools, might be a major competitor. She might have eroded his support among black voters. But in part because she was unable to follow through on her attack – it quickly became clear she took basically the same position as him on busing – she has faded. The remaining top contenders are much less of a threat to him on this front.In Atlanta, Biden said, “I come out of the black community, in terms of my support.” It was a characteristically peculiar thing to say, but not an unfounded one. In South Carolina, you can add the African-American supporters of Mayor Pete Buttigieg and Senators Elizabeth Warren and Bernie Sanders together, and you would still have half the number of Biden’s supporters. (The same is true in some national polls.) Buttigieg’s support rounds to zero. During the last campaign, South Carolina’s blacks backed Hillary Clinton over Sanders by 86 percent to 14 percent.Biden is doing significantly better than the other candidates with Hispanics, too. It’s only among white Democrats that he has fallen behind. In the 1990s, President Bill Clinton pledged to appoint a cabinet that “looks like America.” Biden is the only candidate with a coalition that looks like the Democratic Party.When Warren was surging, she had a lead in both Iowa and New Hampshire. Biden has been dropping in both states over the last few months. It was therefore possible to imagine that Warren could win both: She would not need much African-American backing to do so in those heavily white states. Maybe Biden would perform so poorly as to be effectively knocked out of the race.That scenario was always a long shot, and looks like more of one now that Warren has lost altitude. If no candidate wins both Iowa and New Hampshire while Biden performs well enough, he can stay in. Then his advantages in South Carolina, Nevada and the South may start to register.Biden’s flaws as a candidate are of course obvious. During the Atlanta debate, as at previous debates, he was sometimes tongue-tied. He made a gaffe, saying he had the support of the only African-American female senator ever elected when he meant the first one — which was especially embarrassing since Harris was standing right there. He didn’t stand out for giving exceptionally strong answers, as Buttigieg and Harris sometimes did. Overall, he was just OK.He might OK his way to the nomination. It has been easy to dismiss his chances on Twitter, where younger and more left-wing voices have disproportionate influence. Politicos and journalists spend too much time there, and it skews their view of what voters think. The media (and conservative) attention to left-wingers such as Representative Alexandra Ocasio-Cortez, a Sanders supporter, has also painted a false picture of the Democratic electorate. You’d never know, from watching the Democratic presidential debates, that the number of House sponsors of Medicare for All legislation fell when Democrats took over the chamber.The strong showing of Sanders in the 2016 primaries encouraged the misunderstanding. He got as large a share of the Democratic vote as he did that year because he was an idealistic alternative to Clinton, not because he was a socialist.This mistaken perception of the center of gravity among Democrats caused some candidates, such as Harris and Warren, to position themselves too far to the left. And it caused a lot of people to write Biden off as the nominee — to assume that any early lead in the polls was just a function of familiarity that would vanish as soon as voters saw how old and, by current standards, moderate he is.There have been just enough data points to keep that doubt alive. He has sunk in the states where the campaigning has been most active. Obligatory hedge alert: I’m not saying he’s going to win the nomination. Democratic voters appear to have justified doubts about all four of the current top candidates, which may be why other contenders are still entering the race.When thinking about the race, though, it’s worth keeping in mind that Biden’s chances have been underrated for a long time – and they’re still being underrated now.To contact the author of this story: Ramesh Ponnuru at rponnuru@bloomberg.netTo contact the editor responsible for this story: Tobin Harshaw at tharshaw@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Ramesh Ponnuru is a Bloomberg Opinion columnist. He is a senior editor at National Review, visiting fellow at the American Enterprise Institute and contributor to CBS News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

Is Target (TGT) Stock a Buy After Strong Q3 Earnings?

Target (TGT) shares soared over 14% Wednesday to hit a new all-time high after the retailer posted a strong third quarter performance.

Pelosi, White House Fail to Seal USMCA Deal in Crucial Meeting

(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. House Speaker Nancy Pelosi and Trade Representative Robert Lighthizer made progress on but failed to seal a deal Thursday on the stalled U.S. Mexico Canada free trade agreement, increasing the likelihood the deal won’t get a vote in Congress this year.Ways and Means Committee Chairman Richard Neal, the top negotiator on the pact, said he will continue talks with Lighthizer through next week when the House is in recess to maintain momentum on the final changes Democrats are seeking. He said it is still possible to vote on the deal this year.“The conversation was spirited and it was candid,” Neal told reporters after the meeting. “The toughest issues in bargaining are always the last ones.” Neal said of five remaining disagreements, progress was made on three.Pelosi before the meeting cautioned that even once a deal is reached, it will still take time to write the necessary legislation and go through the steps required for a vote. She was noncommittal when asked about holding a House vote before the end of the year.“We’ve made progress,” Pelosi said as she left the meeting with Lighthizer. “I think we are narrowing our differences.”Passing the trade deal is President Donald Trump’s top legislative priority and would deliver to him a much-needed political win as he faces an impeachment inquiry in the House and heads into a re-election campaign next year. At the same time, it would allow Democrats to show they are capable of legislating even as they are investigating the Trump administration.Political PressureDemocrats from rural swing districts are especially eager to have the deal done. Farmers have faced steep economic losses this year due to Trump’s trade war with China, although the president claims that those headwinds are in fact due to the stalled USMCA.All House members will be up for re-election in 2020, and Democrats who won Republican-leaning districts are under pressure to deliver legislation with enough bipartisan support to become law. Pelosi is keenly aware that preserving her majority depends on these members.Pelosi before the meeting said she is “eager to get this done,” although she said she won’t agree to a superficial deal without stronger enforcement. She said approving a deal with no mechanism to back it up, would just be “NAFTA with sugar on top.”Pelosi said that even if the administration agrees to changes sought by Democrats, the House may not have enough time to write and vote on the legislation before the end of December. Neal said a vote is still possible this year.Any verbal agreement would still need to be drafted into legislation, evaluated for its budget impact and considered in committee, she said. Changes in the text of the agreement would also need to approved by Mexico and Canada.Republicans and the business community have increased pressure on Pelosi as they grow more concerned that pushing the vote into an election year will make it less likely to happen.“She’s always close to allowing a vote. Her conference is always almost there,” Senate Majority Leader Mitch McConnell said of Pelosi on the Senate floor Wednesday. “But we’ve been almost there for months and months with no outcome in sight. Lots of talk; zero results.”To contact the reporter on this story: Erik Wasson in Washington at ewasson@bloomberg.netTo contact the editors responsible for this story: Joe Sobczyk at jsobczyk@bloomberg.net, Steve GeimannFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

Brexit Bulletin: Can Corbyn Win?

Days to General Election: 21(Bloomberg) -- Sign up here to get the Brexit Bulletin in your inbox every weekday.Today on the campaign trail: Labour takes aim at bankers and billionaires — and keeps mostly quiet on Brexit.What’s happening? Labour leader Jeremy Corbyn pulled no punches as he presented the U.K. with the most radical plan for government since 1983, when the party suffered its worst post-war election defeat.Labour plans to nationalize Britain’s railways, water supply and broadband infrastructure. The government’s total tax revenue would increase by around 10%, funding pay hikes for public-sector workers, free university tuition, free care for the elderly and many other goodies.Sensing that the nation is weary of Brexit, Corbyn kept mentions of it to a minimum. He insists he could negotiate a close relationship with the European Union within three months, a plan Prime Minister Boris Johnson calls unrealistic. But Corbyn’s proposal is no more implausible than Johnson’s promise to negotiate and sign an advanced free-trade arrangement by the end of 2020.Labour believes voters are ready to pay for things to get better. Corbyn reckons Britons are tired of creaking infrastructure, of stepping over homeless people, of waiting for hospital treatment, and of underfunded schools. Or, rather, ready for someone else to pay for things to get better: The tax increases are carefully aimed at companies and the wealthy.Is he right? Labour’s 1983 manifesto was dubbed “the longest suicide note in history” by one of the party’s own lawmakers. Nevertheless, public perception mattered more that year: Prime Minister Margaret Thatcher was riding high on victory in the Falklands War; Labour’s Michael Foot struggled to shrug off the memory of strikes under the previous Labour government.Today was a dream come true for activists in the room. Labour has a long tradition of accusing its leaders of betraying the beliefs of the party. But today no one was telling members to rein in their ambitions.Labour is offering plenty of things that will look attractive to plenty of people. Ultimately Corbyn’s success or failure will depend on whether voters look at him and see a potential prime minister who could plausibly get any of them done. And there, polls have him struggling.Today’s Must-ReadsBloomberg’s Greg Ritchie runs through the key proposals in Labour’s manifesto, from Brexit to billionaires, transport, taxation, the NHS, climate and more. Boris Johnson is getting a free pass on Brexit during this election campaign — and if he wins, his deal will sail through Parliament with minimal serious scrutiny, Therese Raphael writes for Bloomberg Opinion. Everyone in the U.K. needs to pay more tax. There can be no relying simply on others to pay a larger share, argues Chris Giles in the Financial Times.Brexit in BriefHitting the Ceiling | Bets on a strong pound are getting in the way of a strong pound. Sterling’s recent good run may have reached a ceiling because traders are already positioned for a boost in the months to come.In Debt | U.K. government borrowing is on the rise even before the spending taps open post-election. The budget deficit in the first seven months of the fiscal year came to £46.3 billion ($60 billion), 10% higher than a year earlier. The shortfall in October alone widened to a larger-than-forecast £11.2 billion, the most for the month since 2014.War Chest | Johnson’s Conservative Party brought in almost £5.7 million in donations larger than £7,500 during the first week of the election campaign, the Electoral Commission said. That’s much more its key rivals: The Liberal Democrats received donations worth £275,000, the Brexit Party £250,000 and Labour a total of £218,500 in the week of Nov. 6 to Nov. 12.Immobile | Britain has become much less socially mobile in recent decades, especially in areas that voted for Brexit in 2016, according to a new report by the Centre for Economic Performance at the London School of Economics.Changing Times | Labour has held the northern English seat of Great Grimsby for 74 years, yet could be on the brink of defeat there. The Economist visited the historic fishing port and concluded that if the Conservatives win, it will signify a realignment of British politics.Embattled Bus | The Conservative Party banned a reporter from the Daily Mirror, a tabloid newspaper that backs Labour, from its campaign “battle bus.” Jodie Ginsberg, chief executive of Index on Censorship, called the move an “appalling” decision.Finally, an Answer | Corbyn is the cover star on this week’s edition of the Evening Standard’s ES magazine. Teasing their big interview, the Standard posted a video of Corbyn answering rapid-fire questions. And he gave a definitive answer on Brexit. “Leave or Remain?” asked the Standard. “Both,” came the answer. Glad that’s sorted.Want to keep up with Brexit?You can follow us @Brexit on Twitter, and listen to Bloomberg Westminster every weekday. It’s live at midday on Bloomberg Radio and is available as a podcast too. Share the Brexit Bulletin: Colleagues, friends and family can sign up here. For full EU coverage, try the Brussels Edition.For even more: Subscribe to Bloomberg All Access for our unmatched global news coverage and two in-depth daily newsletters, The Bloomberg Open and The Bloomberg Close.To contact the author of this story: Robert Hutton in London at rhutton1@bloomberg.netTo contact the editor responsible for this story: Adam Blenford at ablenford@bloomberg.net, Lisa FleisherFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

Twitter Says It Will Let All Users Hide Replies to Tweets

(Bloomberg) -- Twitter Inc. said it will start letting all users hide replies to the tweets they send, an effort to improve the health of discussions and interactions on the service.The company has been testing the feature since summer in different markets, including the U.S. and Japan, but is now rolling it out globally. The tool lets users hide specific comments made on their posts, meaning those comments won’t be visible to other users unless they click a button to reveal them. The change provides a degree of control that could be used to keep spammers away, or to hide hateful or inappropriate replies.“Everyone should feel safe and comfortable while talking on Twitter,” the San Francisco-based company wrote in a blog post Thursday. “To make this happen, we need to change how conversations work on our service.”To contact the reporter on this story: Kurt Wagner in San Francisco at kwagner71@bloomberg.netTo contact the editor responsible for this story: Jillian Ward at jward56@bloomberg.netFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

Adobe Adds Features to iPad Photoshop App After Early Criticism

(Bloomberg) -- Adobe Inc. said new features are coming to its Photoshop for iPad application, responding to criticism that the first version lacked basic functions users expected would be retained from the desktop model of the best-selling image-editing software.The company said Thursday that before the end of the year it would add a Select Subject mode, which uses artificial intelligence to automatically identify and select a subject in an image, and an upgraded version of the Cloud documents function, which synchronizes Photoshop files between the desktop and iPad apps. In the first half of 2020, Photoshop for iPad will get support for Curves, which adjusts the color of an image, and improvements to layers, brush sensitivity, the ability to rotate the canvas and integration with the Lightroom app, the company said in a blog post.Adobe didn’t address other missing elements that users have complained about, including RAW image editing and smart objects. Bloomberg News reported earlier this year that beta testers of Photoshop for iPad said the app was far more watered down than expected.Earlier this month, Scott Belsky, chief product officer of Adobe’s Creative Cloud division, tweeted about the “painful” early reviews for a product his team has worked on for years. Right now in Apple’s App Store, Photoshop for iPad has a user review rating of two of five stars.Adobe is trying to move its most successful software franchises to mobile devices as a way to boost revenue and maintain its stature as the world’s largest maker of creative software. The San Jose, California-based company also recently said it will bring Illustrator to the iPad in 2020.While the apps cater to creative professionals seeking the ability to work on the go, Adobe also is trying to expand the appeal of its photo-editing and illustration software to hobbyists.To contact the reporters on this story: Mark Gurman in San Francisco at mgurman1@bloomberg.net;Nico Grant in San Francisco at ngrant20@bloomberg.netTo contact the editors responsible for this story: Tom Giles at tgiles5@bloomberg.net, Andrew Pollack, Mark MilianFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

Amazon Ups Retail Game With Cashierless Supermarket Plans

Amazon (AMZN) intends to open Amazon Go supermarket next year, which is likely to intensify competition in retail space.

Applied Materials, Warrior Met Coal, Alibaba and Amazon highlighted as Zacks Bull and Bear of the Day

Applied Materials, Warrior Met Coal, Alibaba and Amazon highlighted as Zacks Bull and Bear of the Day