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PepsiCo Suspends Political Donations, Citing Capital Rampage: Live Updates


Credit…Joshua Bright for The New York Times

PepsiCo announced on Thursday that it was suspending all donations from its corporate political action committee, adding to the list of dozens of companies that have come out with some sort of halt on political giving since last week’s violence at the Capitol.

“The peaceful transfer of power is a keystone of the American democratic process, and we categorically denounce the violence last week that attempted to disrupt this process,” a representative said. “In light of these events, we are suspending all political contributions while conducting a full review to ensure they align with our company’s values and our shared vision going forward.”

Pepsi’s PAC spent $140,000 this election cycle, according to the Center for Responsive Politics.

In pausing all donations, Pepsi is not going as far as companies like Walmart and Marriott, which halted donations specifically to the 147 Republicans in Congress who objected to certifying the presidential election result. It joins companies like rival Coca-Cola, along with the energy giant BP and the consulting firm EY, formerly Ernst & Young, in halting donations across the board.

The brokerage firm Charles Schwab said this week that it was shutting down its PAC, citing the divisive political environment.

“I’ve never seen the corporate PAC world react to something this uniformly and strongly,” said Kenneth Gross, a partner at the law firm Skadden who focuses on campaign finance law.

“I think there’s a sense of, ‘Let’s not overreact — but we need to do something,’” he said.

Joe Biden’s spending plans have provided a lift to markets in recent days, but that good feeling lost steam on Friday.
Credit…Amr Alfiky/The New York Times
  • Wall Street is expected to fall when trading begins on Friday, as the initial enthusiasm about President-elect Joseph R. Biden Jr.’s $1.9 trillion spending plan to address the impact of the pandemic gave way to some second thoughts about the cost of all that borrowing.

  • Mr. Biden, speaking Thursday night, said his plan would address the “real pain overwhelming the real economy,” with money to quicken the rollout of the coronavirus vaccine, help for state and local governments to address budget shortfalls, more generous jobless benefits and direct payments of $1,400 to individuals.

  • As virus cases keep climbing in many parts of the world, Mr. Biden’s spending plans have provided a lift to markets in recent days, with the S&P 500 gaining more than 3 percent since Jan. 6. But that good feeling lost steam on Friday.

  • The benchmark Stoxx Europe 600 was 0.6 percent lower on Friday, the FTSE 100 in London lost 0.7 percent, and the DAX in Germany shed 0.6 percent. Asian stock markets closed broadly lower. S&P 500 futures were predicting a drop of more than 0.5 percent when Friday’s session begins.

  • Investors are looking closely at the enormous amount of borrowing that will be necessary to finance Mr. Biden’s proposal. Already, Treasury bonds have sunk in value, and their yields risen. As yields inch up, borrowing costs will rise. That has also raised concerns about tax increases to help underwrite Mr. Biden’s proposal.

  • “There’s the chance that markets will have to pay for this in the form of sharply higher interest rates or tax hikes that could cap equity valuations,” Jeff Buchbinder, equity strategist for LPL Financial, told Reuters.

  • Another factor that may be weighing on U.S. markets: On Friday, the Commerce Department will release a tally of retail sales for December. Retail sales fell in October and November; a poor number for December, the height of the holiday shopping season, would be a sign of weakness in the U.S. economy, which relies heavily on consumer spending.

  • Oil prices stumbled, with Brent crude, the international benchmark, falling 1.6 percent, and West Texas Intermediate down 1.4 percent.

  • On Thursday, the S&P 500 closed 0.4 percent lower, weighed down by losses in Apple, Microsoft and other large tech companies.

A Disneyland parking lot was used as a vaccination site on Wednesday. The resort has been closed for 10 months because of the pandemic.
Credit…Mario Tama/Getty Images

Disneyland, which has been closed for 10 months because of California’s strict approach to coronavirus safety, alerted annual passholders that it was ending the popular program, which it started offering to hard-core customers in the 1980s.

The Walt Disney Company said it would begin issuing prorated refunds in the coming days. Annual passes to Disneyland were most recently $419 to $1,449, depending on access and perks.

Disney declined to say how many people were enrolled. The Orange County Register estimated in 2018 that Disneyland sold “hundreds of thousands” annual passes a year.

In part, the program is ending because Disney expects pent-up demand — from passholders and day guests alike — to far outstrip capacity when the attractions eventually reopen. Walt Disney World in Florida returned in July and has been running at 35 percent capacity since the fall.

In a letter to passholders, Ken Potrock, president of the Disneyland Resort, cited uncertainty about the duration of the pandemic and “expected restrictions around the reopening of our theme parks.”

“We plan to use this time while we remain closed to develop new membership offerings,” he said. He gave no update on when Disneyland might reopen.

Disneyland typically attracts more than 18 million visitors per year; an adjacent Disney theme park in Anaheim, Calif., draws 10 million. Total revenue in 2019 stood at roughly $3.8 billion, according to analysts.

Britain’s economy declined in November, the earliest signal that the country might be heading for its second round of contraction within months — a double-dip recession — because of the severity of the second wave of the pandemic and the restrictions that have been imposed on businesses and the population.

Gross domestic product dropped 2.6 percent in November, when a second lockdown was imposed across England, after six consecutive months of economic growth, according to the Office for National Statistics.

That said, the impact of this second lockdown was much less economically severe than the closures last spring, when the economy fell by more than 18 percent. The difference this time was, in part, because the restrictions were looser and more businesses had adapted: schools remained open, more people could go to their workplaces and many retail and hospitality businesses had added delivery and pickup services. The construction and manufacturing sectors of the economy were the only ones that grew in November, but the overall decline was smaller than most economists had forecast.

Still, the economic recovery that many thought would come once vaccinations began has been postponed, at least until the spring. Much of Britain is under a third lockdown (longer and stricter than the second), as a more contagious variant of the virus has strained the health care system, and economists are forecasting the economy to contract in the first quarter of 2021.

Trade disruptions created by Britain’s exit from the European Union’s single market and customs union, including delays, lost business, and the halting of some services, is also expected to weigh on the economy in the first few months of the year.

“We should expect the economy to get worse before it gets better,” Rishi Sunak, the chancellor of the Exchequer, said in Parliament on Monday. The next day, Andrew Bailey, the governor of the central bank, said the economy was facing its “darkest hour” and that it was in “a very difficult period.”

PepsiCo Suspends Political Donations, Citing Capital Rampage: Live Updates 2
Credit…J. Scott Applewhite/Associated Press

A lawmaker in Washington is asking big banks and other financial services companies to stop processing financial transactions for people and organizations that participated in last week’s attack on the United States Capitol.

Representative Emanuel Cleaver, a Missouri Democrat who serves on the House Financial Services Committee and is chairman of its subcommittee on national security, announced on Thursday that he had written to a trade group, the Electronic Transaction Association, to request the freeze. He also asked the group, which represents companies like Visa, JPMorgan Chase and Square, to immediately stop doing business with anyone who based fund-raising campaigns off the Jan. 6 attack.

“Far-right, white-nationalist and associated domestic terror organizations pose an imminent threat to the national security of the United States and our financial system,” Mr. Cleaver wrote in a letter on Tuesday to the group’s leaders.

“Every effort should be made to identify all terror suspects involved in the attack, prevent the facilitation of further criminal activity, and to disrupt their illicit networks.”

Mr. Cleaver said that several groups, including the Proud Boys, the Boogaloo Bois and the Sons of Liberty, which had been documented as participants in the attack, had already been cut off from many mainstream fund-raising platforms, but were still using “intermediary organizations with questionable terms of service” that might in turn be doing banking and payments business with mainstream companies. He asked that the association’s members assess their “formal and informal relationships” with the groups and work to cut them off He also asked that the group respond to his request by Friday.

“We received the chairman’s letter and are preparing our response on how the payments industry is addressing illegal activity that occurred last week,” Scott Talbot, a lobbyist for the group, said in an email on Thursday.

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