WSJ What’s News - The Trump Transition Kicks Into High Gear

Episode Date: November 11, 2024

P.M. Edition for Nov. 11. WSJ reporter Brian Schwartz on how President-elect Donald Trump’s team is choosing who will staff his White House. And prediction markets had a big moment coming out of the presidential election. WSJ markets reporter Gunjan Banerji discusses whether they’re here to stay. Plus, Heard on the Street global editor Spencer Jakab on what Warren Buffett could do with his $325 billion cash stockpile. Tracie Hunte hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

The Capital Ideas podcast now has a new monthly edition hosted by Capital Group CEO Mike Gitlin. Investment professionals reveal their best mentors, how they find their next great idea, and a few funny stories. Subscribe wherever you get your podcasts. American Funds Distributors, Inc. President-elect Donald Trump is staffing up his second administration, and the process is a little different this time. Trump campaigned on this concept that there are people in his second administration. And the process is a little different this time. Trump campaigned on this concept that there are people in his last administration who

are trying to effectively manage him. And Trump, from everything he is saying, does not want that this time around. And prediction markets offer a chance to place bets on future events. But what about their future? Plus, Wall Street is watching Warren Buffett as the world's most famous investor hoards $325 billion in cash. It's Monday, November 11th.

I'm Tracy Hunt for The Wall Street Journal. This is a PM edition of What's News, the top headlines and business stories that move the world today. President-elect Trump's transition team has about 10 weeks to vet and sign off on top staffing picks before Inauguration Day. Trump announced today that he's picked Elise Stefanik,

a New York congresswoman and one of his fiercest defenders, to be his ambassador to the United Nations. Stephen Miller, the architect of Trump's immigration policy in his first term, is also expected to take on a top role. And as we mentioned on this morning's show, Tom Homan, who had served as Trump's acting director of Immigration and Customs Enforcement, will be his border czar. Wall Street Journal reporter Brian Schwartz joins us now to give us an update on the process. So Brian, how is the transition team putting this list of candidates together for Trump?

Basically the way this has been going is pretty interesting when you contrast it to 2016 when Donald Trump won the first time around. In 2016 you had a number of people, CEOs and the like, coming to Trump Tower in New York, basically auditioning or making referrals for jobs at will. That was the idea then. He's doing things a little differently this time. Howard Lutnick is leading the personnel search for Trump.

He's the co-chair of the Trump transition team. And the plan for now is to present Trump with a litany of options, consider it a digital menu of options for roles in the next administration. That digital presentation is gonna feature headshots of people, resumes of various folks who wanna roll various potential personnel's

television interviews to see if they can present the Trump administration's agenda over the next year or so. And of course Trump's known to really care about how people look when they work for it. This is a very very different effort in terms of bringing in people than they did years ago and frankly it's a little bit more professional than it was in 2016. So what kind of qualities are they looking for in these candidates? I know you mentioned possibly looking good performing well on camera but what else are they considering? Well these candidates? I know you mentioned possibly looking good, performing well on camera, but what else are they considering?

Well, one of the features that we keep hearing about is loyalty to not just the next president, but also to the agenda as well. You want people in their view who are not going to thwart Donald Trump's policy goals, because remember, Trump campaigned on this concept that there are people in his last administration who are trying to effectively manage him. People like John Kelly, who was his chief of staff, he was convinced that Kelly was there to basically stop some of his tendencies and Trump from everything he is saying does not want that this time around. He does not want to be managed in any way by anybody. Brian Schwartz is a White House Economic Policy Reporter at The Wall Street Journal.

Thank you so much, Brian. Thank you. What questions do you have about Trump's campaign promises, how they may be implemented, and what they mean for you? Send a voice memo to wnpod at wsj.com or leave a voicemail with your name and location at 212-416-4328. We might use it on the show. Prediction markets passed a closely watched test by correctly forecasting that Donald Trump would win the election. Their future is more difficult to predict.

So could prediction markets, betting platforms where people wager on the likelihood of future events, become sustainable? Gunjian Banerjee is the lead writer for the Wall Street Journal's live markets coverage and she joins us now. Gunjian, what are some of the biggest prediction markets and how much money have they brought in? Some of the most popular prediction markets are Polymarket, which is an offshore platform. Traders in the US actually aren't permitted to trade on it, but it's become a really widely watched platform during this race. People can also place bets on platforms like Kalshi,

Interactive Brokers, and Robinhood. Traditional retail brokerages have also started offering prediction market trades. There has been a ton of volume on these platforms recently, and we've seen activity hit a record. While the election results were streaming in on Tuesday night, traders, investors were telling me, hey, I'm taking a look at the prediction markets and I'm seeing that Donald Trump's chances of victory are rising. And that was actually shaping how they were positioning in the traditional financial markets.

One of these platforms, Kalshi, said that its users traded more than $500 million this week, up from about $45 million in mid-October. So when will we know if prediction markets are here to stay and not just a passing fad? What we've seen with some of these platforms in the past is that they have this big hot moment around presidential elections or other events and then afterwards activity kind of

dies down. They're not as popular anymore. The big event has passed. I think only time will tell whether or not it's going to fade away. Gunjan Banerjee covers markets for the Wall Street Journal. Coming up, what Warren Buffett's latest moves say about the market. That's after the break. Imagine this. A workforce so adaptable, it can pivot whenever your business pivots. A

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A whopping $325 billion in cash and equivalents, mostly in the form of treasury bills. So what's going on here? Joining us now is Spencer Jacob, global editor of the column Heard on the Street. So Spencer, first up, can you just help us visualize this? How much money is $325 billion? So it's a lot of money. It's enough money that Berkshire Hathaway, the

conglomerate that Warren Buffett has run since 1965, could buy almost any company in the world. He could buy Coca-Cola. He could buy IBM. He could buy Boeing. He could buy Goldman Sachs and have change left over. He could buy a couple of those companies. Not that he's going to, but it's that much money. So why might he be holding on to this much cash? We don't know, he's not saying. It might mean that he is concerned about stock market valuations. His own preferred measure,

which is called the Buffett Indicator, is at an extreme level. That's a measure of the market value of all US companies to the size of the US economy. It's at extremes rarely seen before. But part of it also, and this is the most interesting question, is there are not that many big things for him to buy and he just doesn't like the prices he's seeing.

And so then the next question is what he does with the cash eventually. One of the last times that he hoarded this much cash was right before the financial crisis. Is that why people are concerned that he might be seeing some instability in the future that maybe not everyone else has picked up on yet? Yeah, that is one concern. People are very interested in what he's buying.

He's famously patient, and he's famously a very long-term investor. And so he's not really at all thought of as a market timer. And that's not totally true. Even though he's so long-term and optimistic, there are times when he's kind of given hints that hay stocks are looking pretty pricey. And that's what has people concerned today.

Another question that's gonna emerge, especially with Buffett being, let's face it, you know, close to the end of his career at age 94 is will it do something else with all that cash? Spencer Jacob is the global editor for the Heard on the Street column for the Wall Street Journal. Thank you so much, Spencer.

It was great talking to you. Thank you. US stocks continue their tear. The Dow Jones industrials closed above $44,000 for the first time with a 0.7% gain, while the S&P 500 climbed 0.1% and notched its first close above $6,000. The Nasdaq also edged 0.1% higher. And Bitcoin, which broke past $80,000 for the first time over the weekend, recently

traded around $87,000. And in corporate news, Boeing today said its top quality executive is leaving after less than a year in the role. Elizabeth Lund was appointed back in February to the newly created role after a door plug blew off during an Alaska Airlines flight. Boeing said the 33-year company veteran had planned to retire this year but was asked to take on a safety and quality plan required by federal regulators. She retires in December, and another Boeing veteran, Doug Ackerman, will succeed her.

Boeing has been hit by quality problems and deep losses in its commercial and defense operations. It's cutting 17,000 jobs and has raised more than $24 billion in equity to shore up its finances. Mattel apologized today after the web address for a porn company was mistakenly printed on the packaging for dolls tied to the new film Wicked. Instead of WickedMovie.com, the official website for the Universal Pictures release, the URL printed on the box omits the word movie, leading to a site not appropriate for children. In a statement, Mattel said it deeply regretted the error and was quote, taking immediate action to remedy this.

The company didn't disclose how many toys were affected or if it was recalling any products. Universal Pictures didn't respond to requests for comments. And finally, any plans to travel this holiday season? Are you checking out online reviews before making a reservation at a restaurant or hotel? Well, beware. By some estimates, anywhere from 16% to 40% of those reviews

are phony. The problem is so widespread that the U.S. Federal Trade Commission just created a new rule that will seek civil penalties for businesses who pay for fake reviews or testimonials. WSJ contributor Heidi Mitchell told our Tech News briefing podcast about some of the telling signs to look out for before trusting a review. They tend to be pretty short because even if you're a human, you're not going to spend that much time writing a very long poetic response. They are typically flooded with lots of extremes like, it's awesome!

It's awful! One thing that you should think about is that fake reviewers are going to be pretty much at the extreme. So at the five star and the one star and it's better to just look at the healthy middle. Two to four star reviews are likely to be more meaningful and real than the one and five stars, which may be fake because they're trying to boost or lower the overall score. And you can hear more tips about how you can spot a fake review in our tech news briefing podcast.

And that's what's news for this Monday afternoon. Today's show was produced by Pierre Bienneme and Anthony Bansi with supervising producers Michael Kosmides and Tali Arbel. I'm Tracy Hunt for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening. Balance your trading strategy by adding futures. CME Group helps you manage risk and capture opportunities in all market environments.

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