Two Key Questions For the Market, Following Last Week’s Rally – Weekly Market Report

Good morning,

What’s in this week’s Report:

  • Two Key Questions For the Market, Following Last Week’s Rally.
  • Are there Green Chutes of an Economic Reflation?
  • Why Last Week’s CPI Report Was Important
  • Is Oil Breaking Out?
  • Weekly Market Preview
  • Weekly Economic Cheat Sheet

It’s green on the screen as futures and global markets are all modestly higher thanks to continued momentum from last week and following a quiet weekend.

Economically, the only notable number overnight was the August China Home Price Index, which declined to 8.3% from 9.7% in July.  But, it largely met analyst expectations.

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Politically, focus remains on tax cuts but there was no notable news over the weekend.  Next Monday (Sept 25th) is now a key day as a detailed “blueprint” is expected.

News Headlines:

Today there are no notable economic reports and no Fed speakers, so focus will remain on the “micro” economic.  If Treasury yields can move higher and bank stocks can rally, that can extend last week’s “reflation rebound” ahead of the Fed meeting later this week.

Sincerely,

CapitalistHQ.com

Market

Level

Change

% Change

S&P 500 Futures

2,501.25

4.00

0.16%

U.S. Dollar (DXY)

91.8850

0.022

0.02%

Gold

1,315.90

-9.30

-0.70%

WTI

49.63

-0.26

-0.52%

10 Year

2.22%

0.02

0.91%

 

 

Stocks

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091817 1342 TwoKeyQuest4 - Two Key Questions For the Market, Following Last Week’s Rally - Weekly Market Report

This Week

The Fed is clearly the highlight this week, and while any surprise will move markets, the odds favor a potentially “hawkish” surprise.

The global flash PMIs (out Friday) also will be a market mover if they miss expectations.

Geopolitically, the UN General Assembly starts Wednesday, and while I don’t expect any decisions this week there’s a lot of “noise” regarding the Iran nuclear deal. If the US backs out that likely would be a short-term negative, but not a bearish game changer.

Last Week (Needed Context as We Start a New Week)

Stocks jumped to new record highs last week, claiming the 2500 level for the first time as reflationary money flows buoyed equities and bond yields while investors shrugged off renewed North Korean tensions. The S&P 500 finished the week up 1.58%.

Stocks surged 1% to record territory on Monday as the damage from Hurricane Irma was not as bad as feared, and North Korea chose to put a new ICBM launch on hold (until later last week, of course).

The rally continued on Tuesday as the S&P 500 extended the week’s gains by another 0.34% as a “reflation rebound” took hold in the markets in the wake of firmer inflation data in both China and Great Britain (and to a lesser extent, India).

Stocks were basically flat on Wednesday and Thursday after an in line, but “healthy” CPI report. The S&P 500 closed down just 0.11% on the day after staying contained in a 5-point trading range.

Friday, stocks opened cautiously thanks to a North Korean missile launch after the close on Thursday. Investors largely took the launch in stride relative to recent North Korean developments, but the latest uptick in geopolitical angst still created a headwind for stocks. A rebound in tech shares trumped soft economic data and stocks were able to close Friday with a slight gain on the day, but up solidly on the week.

Your Need to Know

It was a pretty standard reflation rally from an index and sector trading standpoint last week. Small caps and industrials both outperformed the S&P 500 (R2K and Dow both up over 2%).

On a sector level, “cyclical” sectors outperformed: Banks (BKX) rose 4%, semiconductors (SOXX) rose 4.8%, energy rose 2.2% (helped by higher oil) and basic materials also surged. Meanwhile, defensive sectors lagged, as utilities fell 1.1%, consumer staples (XLP) rose just 0.24%, and healthcare rose 0.06% (kept down by profit taking in biotech).

While that sector performance isn’t a surprise, there are two notable observations that, if they continue, could be meaningful for the remainder of the year.

First, while cyclical sectors outperformed, tech held in relatively well, and we didn’t see the declines like back in late-June/early July. FDN rose 1.4% on the week and if the cyclical rally doesn’t mean tech declines, that’s positive for the market.

Second, “value” handily outperformed “growth.” The Russell value index rose nearly 3% while the Russell growth index rose just 1.7%, again driven by financials (which due to underperformance are in the “value category”). If that trend continues (and to be fair, we’ve had several false starts this year), it will necessitate a rotation out of tech/growth and into financials/value.

Bottom Line

Stocks grinded to marginal new highs last week thanks to 1) Expectations of better economic growth/earnings and 2) Hopes of an economic “reflation.” But despite the optimism and higher prices, I’m sorry to say that the outlook for stocks didn’t really improve that much.

First, keep in mind that virtually all of last week’s gains came on Monday following the not-as-bad-as-feared Hurricane hit on Florida by Irma. That outcome does remove a potential economic headwind, but it’s not like it’s an absolute positive, either. So, the gains there were more trading/momentum oriented than anything else (point being, not-as-bad-as-feared hurricane hits aren’t going to power stocks higher).

Second, the uptick in global inflation via stronger-than-expected CPIs in China, Great Britain and the US is a potential positive, as we need stronger inflation to help fuel that reflation rebound and carry stocks materially higher. But, it breeds two key questions that remain unanswered.

First, can economic growth also accelerate? If not, then we’re talking about 1) Global central banks that have to raise rates despite lower growth, and 2) A potential stagflation. Neither of those outcomes are positive for stocks.

Second, do we need to rotate tactical sector exposure to cyclical sectors? The recipe for outperformance in 2017 has been defensive sector exposure (super-cap internet (FDN), healthcare (XLV), utilities (XLU)) and foreign exposure (Europe via HEDJ & EZU and emerging markets via IEMG). That’s been because of middling growth and low inflation. But, if inflation and growth accelerate, then we will need to switch to “reflation” exposed sectors, and that’s something I’ll be covering further this week.

Finally, positive rhetoric on tax cuts was an underappreciated positive on markets last week. Lots of “happy talk” from Republicans (including their promise to reveal details of the tax plan on Sept. 25) raised expectations that a deal will get done. However, if 2017 has shown us anything it’s that nothing is easily done in Washington.

Bottom line, it has paid to remain patient on two trends in 2017: Staying long stocks and staying long those sector outperformers. So, despite rising caution on this market over the medium and longer term, that’s what we will continue to do. From a new-money standpoint, from a 10,000-foot level I’d remain comfortable being “fully” allocated to stocks (meaning whatever your full equity allocation normally is). Tactically, I would continue to allocate new money to what’s “worked,” i.e. super-cap tech/internet, healthcare and defensive and international markets.

At some point, it may be time to rotate into more cyclical sectors and/or reduce equity exposure, but at this point I don’t think we are there yet—although we are watching very, very closely for signs of trouble.

Economic Data (What You Need to Know in Plain English)

Need to Know Econ from Last Week

Up until Friday, last week’s data looked like it was going to show “green shoots” of an economic reflation. But disappointing economic growth numbers on Friday offset better inflation readings from earlier in the week, and while Hurricane Harvey likely impacted the growth data, the bottom line is the data just isn’t good enough to spur a rising tide for stocks.

From a Fed standpoint, the higher inflation data did increase the likelihood that we will get a December rate hike, although the market expectation of that remains below 50%. As such, increased expectations of a rate hike in the coming weeks could be a headwind on stocks, especially if economic data doesn’t improve.

Looking at last week’s data, the most important takeaway was that inflation appears to be bottoming. Chinese, (1.8% yoy vs. (E) 1.7% yoy), British (2.7% vs. (E) 2.5%), and US CPI (0.4% m/m vs. (E) 0.3%) all firmed up and beat expectations, and while it’s just one month’s data, it’s still a break of a pretty consistent downtrend.

That turn in inflation potentially matters, a lot, because it’s making central banks become more hawkish. The ECB is going to taper QE, the Bank of England is going to raise rates sooner rather than later (more on that in Currencies), the Fed may hike again in December and the Bank of Canada was the first major central bank to give us a surprise rate hike in nearly a decade. The times, so it seems, they are a changin’.

That makes an acceleration in economic growth now even more important. Unfortunately, the growth data from last week was disappointing. July retail sales missed on the headline (-0.2% vs. (E) 0.1%) as did the more important “Control” group (retail sales minus autos, gas and building materials). The “control” group fell to -0.2% vs. (E) 0.3%. Additionally, Industrial Production also was a miss. Headline IP fell to -0.9% vs. (E) 0.1% while the manufacturing subcomponent declined to -0.3% vs. (E) 0.1%. Now, to be fair, Hurricane Harvey, which hit Southeast Texas, likely skewed the numbers negatively. But, the impact of that is unclear, and we can’t just dismiss these numbers because of the hurricane.

Bottom line, the unknown impact of Hurricane Harvey keeps this week’s data from eliciting a “stagflation” scare, given firm inflation and soft growth. But if this is the start of a trend, and it can’t be blamed on Harvey or Irma, then that’s a problem for stocks down the road. We need both inflation and growth to accelerate (and at the same time) to lift stocks to material new highs.

Important Economic Data This Week

The two key events for markets this week will be the Fed meeting on Wednesday, and the global flash PMIs on Friday.

Starting with the Fed, normally I’d assume this meeting will be anti-climactic, but it’s one of the meetings with the “dots” and economic projections, so there is the chance we get either a hawkish or dovish surprise. So, don’t be fooled into a false sense of security if people you read say this meeting is going to be a non-event. It very well could be, but there’s a better-than-expected chance for a surprise, too (and if I had to guess which way, I’d say it’d be a hawkish surprise… and that could hit stocks).

Turning then to the upcoming data, given the new-found incremental hawkishness of global central banks, strong growth data is more important than ever to avoid stagflation. We’ll want to see firm global manufacturing PMIs to keep stagflation concerns at bay. Looking more specifically at the US, Philly Fed comes Thursday and that will give us anecdotal insight into manufacturing activity, although the national flash PMI out the next day will effectively steal the thunder from the Philly report.

Commodities, Currencies & Bonds

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In Commodities, the segment was mixed last week as gold pulled back with bonds while the copper pullback continued. Meanwhile, oil futures rallied amid shifting dynamics in the energy markets. The commodity ETF, DBC, rose 1.46%.

Oil was in focus last week as traders watched US inventory data closely to see if the adverse effects of Hurricane Harvey on the oil industry in the Gulf were short lived. On balance, they were, as 582K b/d of output came back online, a nearly 75% rebound from the previous week’s Harvey-related decline. If all things had stayed the same last week, this would have been bearish for prices, but there were other moving parts last week and US production took a back seat for the first time in months. WTI rallied 4.77% on the week.

OPEC chatter was back in the headlines last week as the de facto leader of the cartel, Saudi Arabia, was apparently in talks with other major oil producers as well as industry experts regarding “why” the oil production cuts have not yet been effective. The short answer was exports did not fall enough to support prices, which is exactly what the Saudis are now pursuing from a policy standpoint. Looking ahead, if OPEC members can align themselves and reduce exports that would likely be a material positive for oil markets, especially given the IEA’s positively revised oil demand growth forecasts released last week, which was also a bullish tailwind for the week. For now, the market remains in a sideways range between the mid-$40s and mid-$50s, and that is expected to continue. Still, the fundamental backdrop, at the very least, got less bearish last week.

Gold declined as a part of the reflation trade seen across assets last week, with futures falling 2.04%. The surge in equities reduced safe-haven demand and the swift rise in bond yields weighed on the real interest rate fundamentals (as real rates rise, demand for non-yielding gold declines). Bottom line, gold is in an uptrend right now with an upside target just shy of $1400, but if the reflation money flows continue, gold will decline and the rally will likely end.

091817 1342 TwoKeyQuest7 - Two Key Questions For the Market, Following Last Week’s Rally - Weekly Market Report

091817 1342 TwoKeyQuest8 - Two Key Questions For the Market, Following Last Week’s Rally - Weekly Market Report

Looking at Currencies and Bonds, there was a reflation rebound in the Treasury market last week, although the Dollar Index gave back early gains on North Korea concerns and lackluster growth data. The Dollar Index rose 0.6%.

The big moves last week were in the bond market, so I want to start there. The 10-year Treasury yield rose 15 basis points (which is a huge one-week move) to close at 2.21% (a one-month high) following stronger-than-expected inflation data from China, Great Britain and the US.

Before we get too positive on yields/negative on bonds, 10-year Treasury yields remain in a downtrend on a short- and medium-term basis. A few closes above 2.27% would break a multi-month downtrend while a close above 2.40% would imply a medium-term trend change. So, despite the impressive move, we’re still far away from a sustained short/medium-term uptrend in bond yields.

Turning to currencies, the Dollar Index was higher most of the week, but got hit on Thursday and Friday following the North Korea missile launch and soft Retail Sales and Industrial Production.

The pound was by far the biggest mover vs. the dollar as it surged 2.5% following a stronger-than-expected CPI report, and hawkish commentary from the Bank of England. The BOE kept rates unchanged, but acknowledged that a rate hike would likely be appropriate in the “coming months,” which is sooner than expected.

Looking elsewhere, the yen fell 2.5% vs. the dollar thanks to strong US CPI and a continuation of yen selling following an easing of global macro tensions (North Korea missile launches won’t boost the yen anymore unless it’s toward Guam).

Bottom line, the inflation data was better last week, but it’ll take a hawkish turn from the Fed or additional strong economic data to break the dollar downtrend.

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091817 1342 TwoKeyQuest10 - Two Key Questions For the Market, Following Last Week’s Rally - Weekly Market Report

Special Reports and Editorial

CPI Update and Takeaways

The “reflation rebound” got another boost last week as headline CPI rose the most since January, and beat expectations.

To boot, core CPI met expectations at 0.2%, but a closer look revealed a 2.485% rise, so 0.015% away from the number being rounded up to 0.3%.

Point being, this was a firm inflation number. It wasn’t a hot inflation number (core CPI is still up 1.9% yoy, below the Fed 2.0% target), but it was a firm number and it should increase the chances of another rate hike in December (although it will not make it a consensus expectation). For that to happen, the Core PCE Price Index out later this month will need to also beat estimates.

From a market standpoint, this was a pretty “Goldilocks” CPI report. It was good enough to imply we may still see a reflationary expansion, but not so strong that it makes the Fed materially more hawkish.

From a short-term standpoint, clearly there was focus on the in-line “core” number meeting expectations, as there was a mild “sell-the-news” reaction as the dollar dipped slightly and Treasury yields were flat.

But, beyond the short term, make no mistake—this is a “reflationary” number, and while one CPI report won’t cause me to make wholesale sector allocation changes, it’s safe to say we should all be on “alert” that we may need to rotate out of defensives and into more cyclical sectors (but, not yet).


Are We Seeing “Green Shoots” of A Global Reflation?

Are there “green shoots” of inflation? I reference the Bernanke comments regarding economic growth here, because very quietly we’ve seen two better-than-expected inflation numbers in two big economies.

The Chinese CPI beat (1.8% yoy vs. (E) 1.7% yoy) and the big uptick in core British CPI (2.7% vs. (E) 2.5% yoy) helped the market jump on Monday and Tuesday.

So, the logical question given these two surprise beats is, “Will US CPI also surprise markets?” The inclination is to believe in the trend, but to be clear, higher Chinese and British CPIs have no real bearing on US CPI—so strong numbers in those two reports don’t increase the likelihood of a strong CPI number.

Looking at the effects of the strong Chinese and British CPI, the clear winner there is EUFN, the European financials ETF. With the ECB committed to tapering, and British CPI putting upward pressure on yields, EUFN stands to get a potential tailwind given rising yields.

So, if you’re looking for a way to play a global reflation, EUFN remains one of the best pure plays (we recommended EUFN several months ago, but have only sporadically mentioned it since because not much had changed). Yet with European bond yields potentially rising, this reinforces the opportunity in European banks/financials.

Bottom line, I continue to believe that an economic reflation (better growth, higher inflation) remains the key to a sustained US and global stock rally. And while two numbers don’t make a trend, they were the first positive surprises we’ve had on inflation in months, and we think that’s potentially very important (if it continues).


EIA Analysis and Oil Update

Last week’s EIA report was mixed, and the market’s reaction was a bit confusing at first glance, as WTI rallied despite a larger-than-expected supply build while RBOB gasoline futures fell on the day despite a larger-than-expected draw.

On the headlines, oil stocks rose +5.9M bbls last week vs. expectations of a +3.7M bbl rise (however, this was less than the API’s reported build of +6.2M bbls, which may have invited a slight bid). Meanwhile, the EIA reported that gasoline stocks fell -8.4M bbls vs. (E) -3.0M (and API: -7.9M) which should have been bullish; however, the extreme volatility related to Hurricane Harvey is still coming unwound from the market, and pressure remained on the products relative to oil prices.

Production was the focus of the release, as more than 94% of the lower 48 production gains were reversed in the week that Harvey hit Texas, and the data swing yesterday was another sizeable one. Lower 48 production rebounded 582K b/d to 8.869M b/d, falling short of the psychological 9M b/d mark that had started to weigh on markets. The rebound was solid, but we will need to see a continued rebound back through 9M in the coming weeks for the “US output headwind” to return to its pre-Harvey strength.

Bottom line, attention is turning from the EIA data, which has been the leading reason for suppressed price action in the oil market this year, to overseas policy development and international data. First, the International Energy Agency (IEA) said in their monthly report released yesterday that demand growth for 2017 would edge up 100K b/d to 1.6M b/d. Additionally, the IEA said that global supply, as well as OPEC production, fell in August, both tailwinds for oil near term.

Second, the Saudis are back in the news as they are pressing not only for production cuts, but also export reduction from members. There are some hurdles to this concept, but if they were able to get oil exports down as much as they have lowered production among those countries that agreed to the global “cut,” that could be another oil-bullish development.

Bottom line, there has been a subtle but noticeable bullish shift in global oil market dynamics over the last week, and the potential for a breakout is rising (but that has not yet been confirmed on the charts). In the very near term, OPEC headlines and global production and supply data will be more closely watched, but we cannot ignore US production statistics either, as the post-Harvey rebound could pour cold water on the bulls.

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TRUMP hosting Dems at the W.H. for tax reform dinner — ALEXANDER, PORTMAN and SHAHEEN break bread — Russia probe: loyalty test for Trump staffers — KATY TUR’s new book is out — B’DAY: Matt Lewis

THE NEXT TIME YOU HEAR SOMETHING ABOUT URGENCY IN WASHINGTON, remember this: the House comes in tonight at 6:30 p.m., and is gone by noon on Thursday. The week was cut short by Hurricane Irma, but still …

L.A. TIMES MEXICO BUREAU CHIEF KATE LINTHICUM: (@katelinthicum): “After a devastating earthquake and hurricane (and after Trump failed to send condolences), Mexico today rescinded its offer of aid to the US”.

Story Continued Below

Good Tuesday morning. SPOTTED: Sens. Lamar Alexander (R-Tenn.), Rob Portman (R-Ohio) and Jeanne Shaheen (D-N.H.) dining at Tadich Grill on Pennsylvania Avenue Monday night. Could there be a health-care deal in the offing?

BURGESS EVERETT — “Trump, continuing courting Democrats, will host dinner on tax reform”: “Democratic Sens. Joe Manchin of West Virginia, Heidi Heitkamp of North Dakota and Joe Donnelly of Indiana have been invited and are expected to attend, aides said. GOP Sens. Pat Toomey of Pennsylvania and John Thune of South Dakota are among the Republican attendees. … The three moderate Democrats are all up for reelection next year in states Trump won handily in 2016. They have also been closer to the president than other congressional Democrats. Each declined to join a letter with party leaders outlining conditions on tax reform and all three supported Supreme Court Justice Neil Gorsuch earlier this year.” http://politi.co/2xhae7p

— THE REALITY: Democrats have been shut out of the tax reform process. The Big Six is made up of only Republicans. Republicans have designed a legislative process that only requires Republican support — reconciliation. When asked last week if Democrats would go along, Speaker Paul Ryan said, “I hope Democrats join us on tax reform. I think that’s fantastic if they do. We’re going to go the path we’ve been planning on tax reform.” LET’S BE REAL: Do you really think Donnelly, Manchin and Heitkamp’s votes can be bought with some chicken? By the way, we heard this dinner was originally slated to be only Democrats.

AND, REMEMBER: Republicans have not yet passed a budget — a prerequisite for tax reform. There’s talk they’ll take it up in the House in the last week of September, but the support is not nearly firm enough yet. There’s a chance there is no final action on the budget until October or November. Without a budget, tax reform talks are just that, talk. STEVEN MNUCHIN and GARY COHN are meeting with Senate Majority Leader Mitch McConnell and the Republicans on the Budget Committee today.

More from Colin Wilhelm and Aaron Lorenzo on the lack of reform details http://politi.co/2eSWXHN

**SUBSCRIBE to Playbook: http://politi.co/2lQswbh

WHAT WOULD HAPPEN TO MIDDLE EAST PEACE? — “Some Trump Lawyers Wanted Kushner Out,” by WSJ’s Peter Nicholas, Rebecca Ballhaus and Erica Orden: “Some of President Donald Trump’s lawyers earlier this summer concluded that Jared Kushner should step down as senior White House adviser because of possible legal complications related to a probe of Russia’s involvement in the 2016 presidential election and aired concerns about him to the president, people familiar with the matter said. Among their concerns was that Mr. Kushner was the adviser closest to the president who had the most dealings with Russian officials and businesspeople during the campaign and transition, some of which are currently being examined by federal investigators and congressional oversight panels. Mr. Kushner, Mr. Trump’s son-in-law and confidant, has said he had four such meetings or interactions.” http://on.wsj.com/2y1yloz

— FLASHBACK: July 12, Axios’s Jonathan Swan: “Scoop: Trump lawyers want wall between Kushner, president” http://bit.ly/2y1HUE2

— “Russia probes pose loyalty test for Team Trump,” by Darren Samuelsohn: “Lawyers representing Donald Trump’s current and former aides are giving their clients one simple piece of advice: don’t lie to protect the president. As special counsel Robert Mueller and congressional investigators prepare to question high-ranking aides – including Hope Hicks, Reince Priebus and Sean Spicer – in the coming weeks, Trump’s long history of demanding his employees’ complete loyalty are being put to the test.

“But Trump stalwarts know the president is closely following the media coverage of the Russia case – and the last thing they want is to be deemed a turncoat whose answers end up becoming further fuel for investigators. Several of the lawyers representing current and former aides told POLITICO they’re actively warning their clients that any bonds connecting them to Trump won’t protect them from criminal charges if federal prosecutors can nail them for perjury, making false statements or obstruction of justice.” http://politi.co/2h0Ab1b

HURRICANE UPDATES …

–“Battered Florida tries to assess scope of Irma’s destruction,” by AP’s Jennifer Kay in Miami and Doug Ferguson in Jacksonville: “Battered Florida tries to assess scope of Irma’s destruction,” by Aid rushed in to hurricane-scarred Florida early Tuesday, residents began to dig out, and officials slowly pieced together the scope of Irma’s vicious path of destruction across the peninsula. … [T]he fate of the Florida Keys … remained largely a question mark. … A Navy aircraft carrier was due to anchor off Key West to help in search-and-rescue efforts. Drinking water supplies in the Keys were cut off, fuel was running low and all three hospitals in the island chain were shuttered. A stunning 13 million people, two-thirds of the third-largest state’s residents, plodded on in the tropical heat without electricity, and nearly every corner of Florida felt Irma’s power.” http://bit.ly/2feMNSe

— “Hurricane Irma’s impact, from the air: Florida Keys a bit battered but mostly spared,” by WaPo’s Joel Achenbach “above the Florida Keys”: “The Conch Republic is still here, if dark, dirty, trashed, and weeks away from being what it was before Hurricane Irma blew in. It wasn’t devastated because, for some reason, this massive storm punched below its weight. This was a Category 4 hurricane on the Saffir-Simpson wind scale as it rolled into the Keys. It brought a fair bit of destruction, and tossed boats onto lawns. It turned towns raggedy. But a tour of Southwest Florida and the Florida Keys on Monday afternoon by air suggests that this quirky storm spared the state the kind of direct, punishing violence that residents had dreaded.

“A Coast Guard C-130 transport plane carrying two U.S. senators, a congressman and a handful of journalists left from the Coast Guard air station in Opa-Locka, just north of Miami, for the two-hour tour of hurricane damage. At 2,000 feet, the journey offered no chance for a granular diagnosis, but the big picture was clear: Southwest Florida and its huge population of retirees emerged relatively unscathed. The storm severely battered some of the small and fragile Keys. Key West itself is generally intact, though without power, a water supply and a functional sewage system.” http://wapo.st/2wUekTh

— NYT’S ALEX BURNS ANCHORS THE N.Y.T. LEAD ALL: Damp, Dark and Disarrayed, Florida Starts Coping With Irma’s Aftermath” (with reporting by Trevor Aaronsen from St. Petersburg, Fla.; Jess Bidgood from Tampa, Fla.; Audra Burch and Jonah Bromwich from Orlando, Fla.; Richard Fausset from Isle of Palms, S.C.; Sheri Fink from Houston; Henry Fountain from Naples, Fla.; Joseph B. Treaster from Miami; and Caitlin Dickinson, Christine Hauser, Hannah Fairfield, Daniel Victor and Mary Williams Walsh from New York). http://nyti.ms/2wWTDUr

DATA DU JOUR – Over 24 hours on Sunday, Snapchat received almost 250,000 submissions from Snapchatters to their Irma news story, which is two and a half times more than what the company saw during Harvey last week.

****** A message from CTIA and America’s wireless industry: The global race to deploy 5G wireless is on—and America needs to win. Government action on spectrum and infrastructure policy will allow U.S. wireless companies to invest $275 billion, create more than 3 million jobs, and add $500 billion to the economy, according to Accenture. Learn more at CTIA.org. ******

FOR THE WHITE HOUSE’S TO DO LIST — “After nine months, federal offices are still waiting to hang Trump’s picture,” by WaPo’s Lisa Rein: “In the lobby of every federal building, just inside security turnstiles and before the elevator banks, a framed photograph of the president has always hung on the wall. Not so anymore. Nine months after Donald Trump’s inauguration, pictures of the president and Vice President Pence are missing from thousands of federal courthouses, laboratories, military installations, ports of entry, office suites and hallways, and from U.S. embassies abroad. …

“Federal agencies ordered photographs of their new commander in chief months ago. But they say they are still waiting for the Government Publishing Office, the printer of official portraits, to send them for distribution by the General Services Administration, which owns or leases 9,600 federal buildings across the country. The Government Publishing Office says it has yet to receive the images from the White House. And the White House says the president and vice president have not yet decided when they will sit for the type of high-quality official photographs usually churned out by the modern GPO, continuing a portrait tradition that began after the Civil War.” http://wapo.st/2vQrKfd

THE LATEST ON NORTH KOREA …

— “Oil will keep flowing, but UN sanctions hit Pyongyang hard,” by AP’s Eric Talmadge in Tokyo: “North Korea will be feeling the pain of new United Nations sanctions targeting some of its biggest remaining foreign revenue streams. But the Security Council eased off the biggest target of all: the oil the North needs to stay alive, and to fuel its million-man military.

“Though the United States had proposed a complete ban, the sanctions by the U.N. Security Council to punish North Korea for its sixth nuclear test cap Pyongyang’s annual imports of crude oil at the same level they have been for the past 12 months: an estimated 4 million barrels. Exports of North Korean textiles are prohibited, and other nations are barred from authorizing new work permits for North Korean workers, putting a squeeze on two key sources of hard currency.” http://bit.ly/2gZalyz

— “How Russia quietly undercuts sanctions intended to stop North Korea’s nuclear program,” by WaPo’s Joby Warrick: “Russian smugglers are scurrying to the aid of North Korea with shipments of petroleum and other vital supplies that could help that country weather harsh new economic sanctions, U.S. officials say in an assessment that casts further doubt on whether financial measures alone can force dictator Kim Jong Un to abandon his nuclear weapons program. The spike in Russian exports is occurring as China — by far North Korea’s biggest trading partner — is beginning to dramatically ratchet up the economic pressure on its troublesome neighbor in the face of provocative behavior such as last week’s test of a powerful nuclear bomb.

“Official documents and interviews point to a rise in tanker traffic this spring between North Korean ports and Vladivostok, the far-eastern Russian city near the small land border shared by the two countries. With international trade with North Korea increasingly constrained by U.N. sanctions, Russian entrepreneurs are seizing opportunities to make a quick profit, setting up a maze of front companies to conceal -transactions and launder payments, according to U.S. law enforcement officials who monitor sanction-busting activity.” http://wapo.st/2vReWp4

— BREAKING THIS MORNING: BOEHNER TO TRUMP: DON’T WITHDRAW FROM SOUTH KOREAN TRADE DEAL: Former Speaker John Boehner — a staunch proponent of free trade — is urging Trump to bolster ties with Seoul: “For our strategic endeavors to succeed, however, the United States must strengthen — not weaken — its already vital economic relationships in the Pacific, from South Korea and Japan to Australia and China. We cannot isolate the regime in Pyongyang by isolating ourselves.

“Withdrawing from the Korea-U.S. Trade Agreement … would undermine America’s strategic objectives in the Pacific region and undercut our own workers and employers, who continue to depend on the free flow of goods and services between the US and the Republic of Korea. Instead of pulling back from our current engagements and commitments, we must renew and strengthen our relationships in the Pacific region, not just with South Korea, but with China, as reflected in the joint commitment to economic cooperation that was expressed by President Trump and President Xi in April; and with Australia and Japan, our long-standing allies, whose alliances and friendships with America are now more important than ever.” PDF of full statement http://politi.co/2wWphBn

TRUMP’S BUDGET — “Congress Rejects Trump Proposals to Cut Health Research Funds,” by NYT’s Robert Pear: “Back in March, when President Trump released the first draft of his budget proposal for the coming fiscal year, he asked lawmakers for deep cuts to one of their favorite institutions, the National Institutes of Health — part of a broad reordering of priorities, away from science and social spending, toward defense and border security. Six months later, Congress has not only rejected the president’s N.I.H. proposal; lawmakers from both parties have joined forces to increase spending on biomedical research — and have bragged about it.

“The Senate Appropriations Committee approved a bipartisan bill last week providing $36.1 billion for the health institutes in the fiscal year that starts next month. Senator Roy Blunt, Republican of Missouri and the chairman of the subcommittee responsible for health spending, said it was the third consecutive year in which he had secured a $2 billion increase for the agency, amounting to an increase of about 20 percent over three years. The audience erupted in applause when Senator Lamar Alexander, Republican of Tennessee, announced the increase at a hearing of a separate Senate committee.” http://nyti.ms/2eSBRJL

KELLY VS. GUTIERREZ — “John Kelly fires back at Democrat who called him ‘disgrace to the uniform,’” by FoxNews.com’s Christopher Wallace: “Illinois Rep. Luis Gutierrez had leveled the criticism at Kelly over his support of President Trump’s decision to end a controversial program that shielded young illegal immigrants from deportation. In an email to Fox News late Sunday, Kelly responded by saying Congress did ‘nothing’ to help so-called Dreamers when they had the chance. ‘As far as the congressman and other irresponsible members of congress are concerned, they have the luxury of saying what they want as they do nothing and have almost no responsibility,’ Kelly said. ‘They can call people liars but it would be inappropriate for me to say the same thing back at them. As my blessed mother used to say “empty barrels make the most noise.”’ http://fxn.ws/2wmb6DC

TRUMP’S TUESDAY — THE PRESIDENT is meeting with Commerce Secretary Wilbur Ross and EPA Administrator Scott Pruitt. He meets with H.R. McMaster before hosting Malaysian Prime Minister Najib Abdul Razak at the White House. Afterwards, he is huddling with Secretary of State Rex Tillerson. He’s then hosting senators at the White House.

ANNA’S POSTCARD FROM LONDON — POLITICO LONDON’S TOM MCTAGUE shares with us two fun tidbits from his upcoming book lifting the lid on Prime Minister Theresa May’s disastrous decision to call a snap general election “Betting the House: The Inside Story of the 2017 Election” with Tim Ross. Interesting nuggets for this side of the pond — former President Barack Obama called conservative campaign headquarters (the same team former aide Jim Messina worked for) on the day of the election to let them know someone from the Labour’s campaign told him the party was going to lose 20 to 30 seats. …

ON THERESA MAY: The two write that an aide briefing the prime minister before a Sunday show appearance in January was concerned May would get asked about President Donald Trump. “As she waited to collect the PM from her Sunday morning church service, May’s spin chief knew she would have to find a way to prepare her boss. She decided she would just have to say it. ‘Prime Minister, it’s possible she will be asked what you think of Donald Trump saying he can grab women by the p****.’ In the front seat of the Government Jaguar, the police protection officer snorted. May was told not to grimace because the camera was likely to zoom in on her face in a close-up. In the end, May remained perfectly composed, waiting, expressionless, before answering: ‘I think that’s unacceptable.’ Pre-order the book on Amazon http://amzn.to/2xWN3MV

THE JUICE …

KATY TUR’S BOOK IS OUT TODAY … WAPO’S CARLOS LOZADA – “Katy Tur’s insider memoir chronicles the Trump campaign — and the indignities of reporting while female” http://wapo.st/2jlqfUm NYT REVIEW, by Jill Abramson: “A Memoir by Donald Trump’s Favorite Target” http://nyti.ms/2vR1fX8BUY THE BOOK: http://amzn.to/2gXyRQA … Ranked No. 68 on Amazon as of this morning … MARK YOUR CALENDARS for Katy’s event with Jake at Politics and Prose Sept. 22 http://bit.ly/2wWffjD

— MORNING JOE IS 10! — “Morning Joe” is starting a 10-year anniversary Twitter sweepstakes this morning ahead of the anniversary show on Sept. 19. A pic of the prizes that fans can win http://bit.ly/2h0y2mv More info http://on.msnbc.com/2xtKk1p

— American Action Network is launching a $2.5 million TV ad campaign on tax reform targeting 23 congressional districts nationwide, including those in leadership, on key committees, in the Freedom Caucus and holding competitive seats. List of districts http://bit.ly/2eS79AqThe ad http://bit.ly/2wXgUFG

FOR YOUR RADAR — THREE NEW IPHONES — “What to Expect at Apple’s Biggest Event in Years: Look for the iPhone X, iPhone 8, iPhone 8 Plus and a bunch of other iProducts on Tuesday,” by Bloomberg’s Mark Gorman. https://bloom.bg/2wXChrQ

DESSERT — HAPPENING FRIDAY — Sen. Tim Kaine (D-Va.), a noted harmonica player, and Sen. Lamar Alexander (R-Tenn.), a multi-instrumentalist, are joining members of the Buck Mountain Band to perform as “The Amateurs” at the 17th Annual Bristol Rhythm and Roots Reunion on Friday. 15-second video of Alexander (on the piano) and Kaine practicing http://bit.ly/2jlguWj

AUSTIN WRIGHT: “Kaine hits the trail again, battling 2016 ghosts on his way”: “An aide to Tim Kaine enters a diner in Charlottesville and informs the host that the Virginia senator is about to walk in. The host smiles and cracks a joke: ‘You mean the guy who lost to Trump?’ Ten months after the presidential election, Kaine is still trying to shed the stigma of being the vice presidential candidate on the ticket that came up short against Donald Trump, a man so reviled by Kaine’s fellow Democrats that many of them can’t bear the thought of him serving out his full four-year presidential term. The senator is back on the campaign trail — stumping in Virginia for Democratic gubernatorial candidate Ralph Northam and preparing for his own 2018 reelection campaign.

“But even as Kaine tries to keep his focus on the next election, there are constant reminders of the last one — the only election he’s ever lost. Trump, it seems, looms over everything. Kaine isn’t interested in relitigating one of the biggest electoral upsets in U.S. history. He looks visibly uncomfortable talking about the election and cautions against ‘overinterpreting’ what went wrong.” http://politi.co/2y1mR4B

HRC: GOING NOWHERE — NPR’S TAMARA KEITH interviews HILLARY CLINTON: When asked about critics who believe she should disappear from public life, CLINTON: “Well, they’re going to be disappointed because I think it’s important for people with my experience and my insight into what went on in the campaign but more generally about our country to speak out. We need more voices, not fewer voices.” Clinton chronicler Jonathan Allen in POLITICO magazine reviews her new book http://politi.co/2vPKsUf

STATE OF THE DARK ARTS — “Russia Used Facebook Events to Organize Anti-Immigrant Rallies on U.S. Soil,” by Ben Collins, Kevin Poulsen, and Spencer Ackerman in The Daily Beast: “Russian operatives hiding behind false identities used Facebook’s event management tool to remotely organize and promote political protests in the U.S., including an August 2016 anti-immigrant, anti-Muslim rally in Idaho, The Daily Beast has learned. A Facebook spokesperson confirmed to the Daily Beast that the social-media giant ‘shut down several promoted events as part of the takedown we described last week.’ … The Facebook events—one of which echoed Islamophobic conspiracy theories pushed by pro-Trump media outlets—are the first indication that the Kremlin’s attempts to shape America’s political discourse moved beyond fake news and led unwitting Americans into specific real-life action.” http://thebea.st/2w42y94

ISAAC DOVERE interviews REP. WILL HURD (R-TEXAS) in the latest “OFF MESSAGE” podcast: “To House Republicans who don’t like the funding deal President Donald Trump made with Democrats, Rep. Will Hurd has a message: Get yourself together, or quit complaining. Otherwise, get used to the feeling of watching the Republican president brag about how much he’s getting done with Chuck and Nancy. ‘If we’re not in agreement on what the topic is going to be or what we want to achieve, then guess what? You’re probably not going in with a strong hand,’ Hurd told Dovere. ‘I think rank-and-file members need to understand that there is a team aspect to politics.’ On getting rid of the debt ceiling: ‘you give that up, you’re basically giving up your responsibility.’” http://politi.co/2vQPjVrListen to the full podcast http://apple.co/2h1efTG

ROSIE GRAY: “An Ousted NSC Official Is Joining the House Intelligence Committee Staff”: “A former National Security Council official, forced out by National-Security Adviser H.R. McMaster in July, is set to join the staff of the House Permanent Select Committee on Intelligence, according to two sources familiar with his move. Derek Harvey, who was the NSC’s senior director for the Middle East and had been appointed by the former National-Security Adviser Michael Flynn, was among several officials who were ousted this summer.” http://theatln.tc/2xWNYNq

****** A message from CTIA and America’s wireless industry: Tomorrow’s 5G networks will create 3 million jobs, add $500 billion to the economy, and fuel innovation and entrepreneurialism across every sector. If policymakers move quickly to release more spectrum and modernize infrastructure rules, the wireless industry stands ready to invest $275 billion to build these next-gen networks, according to Accenture. This will drive breakthrough advancements in remote health care, connected vehicles, energy, education and beyond—making our lives better and safer. But the race to deploy 5G wireless networks is underway—and we’re at a critical moment. The EU, China, Japan, South Korea and others are doing everything they can to win. If policymakers act now, the U.S. can continue our global leadership in wireless. Learn how at CTIA.org. ******

GOOD LIFE LESSON — “An Exit Interview With Richard Posner, Judicial Provocateur,” by NYT’s Adam Liptak: “Judge Richard A. Posner, whose restless intellect, withering candor and superhuman output made him among the most provocative figures in American law in the last half-century, recently announced his retirement. The move was abrupt, and I called him up to ask what had prompted it. ‘About six months ago,’ Judge Posner said, ‘I awoke from a slumber of 35 years.’ He had suddenly realized, he said, that people without lawyers are mistreated by the legal system, and he wanted to do something about it.

“For starters, as is his habit when his interest alights on a fresh topic, he wrote a book on the subject. Judge Posner blurts out books at a comic pace. ‘I realized, in the course of that, that I had really lost interest in the cases,’ he said. ‘And then I started asking myself, what kind of person wants to have the same identical job for 35 years? And I decided 35 years is plenty. It’s too much. Why didn’t I quit 10 years ago? I’ve written 3,300-plus judicial opinions.’” http://nyti.ms/2wU2vfX

MEDIAWATCH — “Laura Ingraham set to take over Fox News’ 10 p.m. slot,” by CNN’s Brian Stelter and Hadas Gold: “Ingraham is expected to take over the 10 p.m. hour on Fox News, according to people who spoke on condition of anonymity. While there may be one or two final details to negotiate, Ingraham has been telling friends that the deal is essentially done … Her new show will be part of a broader change to the network’s top-rated prime time lineup. Sean Hannity’s show, currently at 10 p.m., will move one hour earlier to 9 p.m. … And ‘The Five,’ a talk show originally named for its 5 p.m. time slot, will shift from 9 p.m. back to its namesake hour.” http://cnnmon.ie/2wW1h15

— FIRST IN PLAYBOOKFrom an FT memo going out today: “Pilita Clark is appointed business columnist and associate editor. … Lyndsey Jones is appointed an executive editor. … Robin Kwong is appointed head of digital delivery under editorial director Robert Shrimsley. … Paul Murphy is appointed investigations editor.”

— KIMBERLY DOZIER has been named executive editor of The Cipher Brief. She previously was a reporter for the AP, CBS News and The Daily Beast.

— SCOTT WILSON will cover “the West and especially California” for The Washington Post. He had been national editor (h/t Morning Media).

— TAYLOR ANTRIM has been named executive editor of Vogue. He has spent five years at Vogue, first as senior editor and then articles editor.

SPOTTED: Gina McCarthy last night at Dirty Habit bar near the EPA, having a relaxed drink. She had a rolling backpack with her. … Carly Fiorina last night at Charlie Palmer … Justice Stephen Breyer in coach on American’s 5:30 p.m. shuttle from DCA to Boston … Eric Cantor at District Commons last night entertaining two people — pic http://bit.ly/2wUoB1S … former Ariz. Sen. Jon Kyl in seat 23C of an American Airlines flight from PHX to DCA.

OUT AND ABOUT – Pool report: “The Congressional Hispanic Caucus Institute kicked off their annual conference with a reception featuring Google Arts & Culture’s new Latino Cultures in the U.S. — the largest ever online collection of artifacts and stories dedicated to U.S. Latino history and culture. Guests entered through a hologram wall of the mural ‘Mundos de Mestizaje’ by Frederico Vigil and took virtual field trips in the virtual reality lounges.”

SPOTTED: Reps. Joaquín Castro (D-Texas), Ruben Gallego (D-Ariz.), Tony Cárdenas (D-Calif.) Nanette Barragán (D-Calif.), Jimmy Gómez (D-Calif.) and Salud Carbajal (D-Calif.), Mayor Muriel Bowser, Henry Muñoz and Kyle Ferari, Domenika Lynch, Susan Molinari, Caroline Atkinson, Daniel Alegre, Laura Marquez, Stephanie Valencia and Katherine Vargas.

TRANSITIONS — Tina Tchen is returning to Chicago to lead the Chicago office of the law firm Buckley Sandler http://trib.in/2wXdMelAdam Sharon has joined the Harbour Group as a senior vice president. He previously worked at Prime Strategies, and was the former Democratic communications director of the Senate Foreign Relations Committee. … Adrienne Kimmell is joining NARAL Pro-Choice America as the VP of strategic research. She previously was executive director of the Barbara Lee Family Foundation and Barbara Lee political office. …

Farrin Jay has joined the Snap Inc communications team. She was previously at NBC News, where she did PR for the “Today Show.” … Chris Simone started this week as a legislative affairs specialist on contract to FEMA for Klett Consulting Group. He was previously a researcher at America Rising Squared.

K STREET FILES — Mehlman Castagnetti Rosen & Thomas is launching a new podcast, “14th & G,” which is “designed to deliver quick, easily digestible insights into the business of Washington”. The podcast is hosted by Mehlman Castagnetti principal CR Wooters. http://politi.co/2xhvx8T

BIRTHWEEK (was yesterday): hedge fund manager David Tepper … Mark Dubowitz, CEO of the Foundation for Defense of Democracies

BIRTHDAY OF THE DAY: Matt Lewis, senior columnist at The Daily Beast and CNN political commentator. A fun fact about Matt: “My mom had twelve siblings; my dad had nine. They must have gotten tired of all the noise, because I’m an only child.” Read his Playbook Plus Q&A: http://politi.co/2wWcfUh

BIRTHDAYS: “Face the Nation” senior producer Jill Jackson (hat tip: Caitlin Conant) … Andrea DiVito of “Fox News Sunday” … GQ’s Ben Schreckinger … Politico’s Walt Houseknecht … Don Fowler, former DNC chairman … former Rep. Henry Waxman (D-Calif.) … former Waxman staffer Greg Wetstone … Dave Willett … Johnny Enterline of LCV … Natalie Raps, director at SKDKnickerbocker … Andrew Whalen … Rep. Evan Jenkins (R-W.Va.) … Rep. Trey Hollingsworth (R-Ind.) … Kansas Gov. Sam Brownback … Ed Moy, former director of the U.S. Mint … Maria Harris Roumel … Desiree Sayle … Jill Alper (h/t Jon Haber) … Max D’Onofrio, press secretary for Sen. Mike Enzi (R-Wyo.) … Emily Lampkin … Melissa Schulman, SVP of gov’t and public affairs at CVS Health … former Sen. Scott Brown (R-Mass.) (h/t Ryan Williams) … Brett Thompson, partner at Banner Public Affairs and CEO of Pork Barrel BBQ … NYT’s Kim Severson … John Lippman, deputy director for programming at VOA … Alex Botting of the U.S. Chamber of Commerce … Pam Stevens …

… Courtney O’Donnell, head of external affairs at Airbnb … Ethan Klapper, global social media editor at HuffPost … Peter Robbio, SVP at CRC … Fox News alum Jim Angle … Fred Schuster … Jason Stverak … James Faeh … Edelman’s Gavin Mathis … Jason O’Malley … Amazon’s Allison Marshall … Joseph Voss … Anne Johnson … lawyer Matthew Wald … Erin Hood … Russel Wade … Chip Ward is 64. He’s a big Terp fan and “thrilled that Maryland is off to a 2-0 start. His dad, Bob Ward, was consensus all-American football player there in early 50s” (h/t Jon) … Bill Hayden … Alison Harden Siciliano … Allison Ramiller … Nate Yohannes, director of business development at Microsoft and an Obama alum (h/t Sophia Kim) … Tom Vilmain … Alexandra Simbana (h/ts Teresa Vilmain)

****** A message from CTIA and America’s wireless industry: We need new rules for new 5G networks. New policies that will allow the U.S. to win the race to 5G and enable breakthrough advancements in healthcare, transportation, energy and more. First, a pipeline of low-, mid-, and high-band spectrum will help meet today’s mobile needs and enable the 5G networks of tomorrow. Second, every level of government must modernize their rules for the building of small cell wireless infrastructure. Third, permanent and common sense federal regulations for interstate services like mobile broadband will preserve an open internet and protect consumer privacy while promoting innovation and investment. Finally, America’s tax structure must be updated to spur billions of dollars in new 5G investment. Learn more about how wireless is working to invest in America’s future at CTIA.org. ******

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Posted in news | Tagged , , , | Comments Off on TRUMP hosting Dems at the W.H. for tax reform dinner — ALEXANDER, PORTMAN and SHAHEEN break bread — Russia probe: loyalty test for Trump staffers — KATY TUR’s new book is out — B’DAY: Matt Lewis

Why Last Week’s Price Action Was Worse Than It Seemed

Good morning,

What’s in this week’s Report:

  • Why Last Week’s Price Action Was Worse Than It Seemed
  • ECB Meeting Takeaways (It Was Slightly Hawkish)
  • Why The Debt Ceiling Deal Isn’t a Positive For Stocks
  • Weekly Market Preview
  • Weekly Economic Cheat Sheet

Futures are sharply higher this morning after Hurricane Irma dealt a “not as bad as feared” blow to Florida, while North Korea didn’t perform a missile test over the weekend.

Hurricane Irma didn’t make a direct hit on Miami/Ft. Lauderdale and as such the insurance stocks are rallying, and that’s leading the market higher.

Geo-politically, it was feared that North Korea could launch an ICBM test this weekend, but they held a parade instead.

Today there are no notable economic reports and no Fed speakers, so focus will be on the financials.  That sector (XLF and BKX) needs to rally throughout the day.  If the rally in financials stalls after the open, the market could give these early gains back.

Turning to Hurricane Irma, first, thank you for the well wishes we received ahead of the storm!

It appears we “dodged a bullet” down here in Palm Beach County but the report was written under less than ideal circumstances, so please excuse typos, etc.  Additionally, there is still damage and clean up to be done so our response to email, etc. will be slower than normal today.  But, assuming our offices did not sustain damage, I do expect us to be back to full strength tomorrow.

Sincerely,

CapitalistHQ.com

Market

Level

Change

% Change

S&P 500 Futures

2,474.00

11.50

0.47%

U.S. Dollar (DXY)

91.60

0.15

0.16%

Gold

1,339.00

-12.20

-0.90%

WTI

47.75

0.27

0.57%

10 Year

2.10%

0.04

1.94%

 

 

Stocks

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091217 1552 WhyLastWeek4 - Why Last Week’s Price Action Was Worse Than It Seemed

This Week

Economic data on Thursday and Friday (CPI/Retail Sales/IP) will be the focus of the week, although there are a few other notable events. First, we get the latest Chinese economic data (also on Thursday). Additionally, AAPL unveils a new iPhone on Tuesday. Finally, concerns remain that North Korea could test another ICBM, potentially spiking geopolitical concerns again.

Last Week (Needed Context as We Start a New Week)

Stocks dropped modestly last week thanks to an uptick in political drama, and new lows in the dollar and Treasury yields. The S&P 500 fell 0.61% and is up 9.94% year to date.

Stocks started the holiday-shortened week lower, as the S&P 500 dropped 0.76% last Tuesday following the North Korea hydrogen bomb test.

Markets bounced back slightly as the S&P 500 rose 0.13% Wednesday after a temporary deal was reached to extend the debt ceiling and avoid a government shutdown. Markets digested those moves on Thursday as the S&P 500 was flat after Tuesday’s lows, as hurricane-related economic worries were offset by a lower dollar.

The S&P 500 resumed its decline on Friday thanks to extreme weakness in the banks and financials. The S&P 500 fell 0.15% to end the week with modest losses.

Your Need to Know

The near-4% collapse in bank stocks and near-3% plunge in financials was the story in the markets last week, and it’s potentially very important for two reasons.

First, banks and financials collapsed because of the decline in bond yields and the flattening yield curve, and those signals historically imply future economic slowing.

Second, if we are going to see an economic reflation, which is what we should be seeing in the economy at this point, then banks and financials should lead the market higher. We got a whiff of that earlier this summer, but that now has failed spectacularly, and it’s left this market again relying on defensive sector leadership, which is not what we want to see if we’re hoping for an economic acceleration. I view this breakdown in financials and banks as a potentially very bad sign for reflation prospects.

Bottom line

The price action and events of last week were actually more negative than the 0.61% decline in the S&P 500 would imply.

First, the price action in bonds and the yield curve is becoming downright unnerving, because they are signaling continued slow growth or, potentially, something worse.

Second, the collapse in financials again leaves this market without a cyclical sector leader, and that’s worrisome given valuations.

Third, politics got worse this week. The three-month debt ceiling extension only sets up a bigger drama in December, and it potentially reduces the chances of tax reform at year end. Additionally, there are multiple reports of a fractured relationship between Gary Cohn and President Trump. If Cohn leaves, the market will view that as a negative for tax cuts, and that will potentially remove one of the few positive catalysts for stocks this fall (leaving continued earnings growth as the only identifiable positive catalyst).

So, while the S&P 500 only saw modest declines, I view last week as a pretty bad week. From an allocation standpoint, the events of last week are not enough to make me raise cash or de-risk, but it does reinforce my preference to allocate to defensive sectors such as FDN, XLV, XLP, XLU, and also international equities such as emerging markets via IEMG and Europe via HEDJ and EZU.

But, we are holding allocations out of respect for the uptrend that’s been in place since early 2016. Staying the course and holding longs in this market through potential trouble has been the right move for two years, and I don’t see enough on the horizon to change that, yet. Though to be clear, my sense of concern is rising, and I do still advocate Sept./Oct. Nasdaq or Russell puts to protect YTD gains against a surprise “air pocket.”

Economic Data (What You Need to Know in Plain English)

Need to Know Econ from Last Week

The economic data remains remarkably consistent: Growth data remains good but not great while inflation data relentlessly disappoints. From a market standpoint, that means that the economy isn’t at imminent risk of a material loss of momentum, but at the same time there are no signs of the type of acceleration that would lead to a rising tide carrying stocks higher.

From a Fed standpoint, inflation remains lackluster, and that’s causing a reduction in expectations for a December rate hike. That’s not a medium/longer-term good thing for stocks, because it further throws into doubt the chances for reflation—and economic reflation remains the key to sustainably higher stock prices.

Looking at last week’s data, there weren’t many numbers, but the numbers we got reinforced the “slow growth/low-inflation” trend.

The ISM Non-Manufacturing PMI (or service sector PMI) rose to 55.3 from 53.9. So, there was acceleration in activity in August. But that acceleration missed estimates of 55.8, and while a number in the mid-50s is solid, it’s not the type of number that implies we’re seeing real acceleration.

The other notable number last week that was largely ignored by the media was August productivity and unit labor costs. An uptick in productivity, if it’s consistent and material, could lead to an economic acceleration. The reason for that is simple: The economy is basically at full employment. But, if those workers get more productive, the total economic output increases, and we get a stronger economy.

August productivity rose to 1.5% vs. (E) 1.3%, so that is a good sign. It’s not nearly the acceleration we need, but it’s a step in the right direction.

However, that productivity number wasn’t the important one from this release. The important number was unit labor costs. Rising unit labor costs is a precursor to larger inflation, so it’s an important number. And, unfortunately, it once again missed expectations. Unit labor costs rose 0.2% vs. (E) 0.3%, providing even more fodder for the “doves” on the Fed to not hike rates in December.

Finally, turning to the ECB meeting last week, you know by now it was slightly hawkish. Draghi signaled the ECB will reveal the details of QE tapering at the October meeting, and he again chose not to try and “talk down” the euro, which led to the euro hitting new multi-year highs (and the dollar hitting multi-year lows).

From a market standpoint, that dollar weakness is a slight tailwind on US stocks, although not a material one. Until we get better inflation or growth data here in the US, the trend of euro strength/dollar weakness will continue.

Important Economic Data This Week

All the important economic reports this week come out Thursday and Friday, which is nice because that gives us a bit of time to get ourselves squared away following all the hurricane issues from last week.

The most important number this week is CPI, out Thursday. As you know, inflation remains the key issue with the economy and Fed expectations. Frankly, we need CPI to start firming because it’ll give us hope of a looming economic reflation. If, however, this number disappoints, as it has for a few months, we’ll see new lows in the dollar and new lows in Treasury yields, neither of which are a good thing for stocks beyond the very short term.

After CPI, there are three important growth numbers out this Friday: Retail Sales, Industrial Production and Empire Manufacturing Survey.

Starting with the first two, remember there remains a large gap between “hard” economic data and surveys. Put plainly, actual economic data is not rising to the level that’s being implied by the PMIs and/or consumer confidence. The longer that occurs, the more likely it is that the surveys are exaggerating economic growth.

So, the sooner hard economic data begins to accelerate, the better. If retail sales and industrial production can beat estimates, that will be an economic positive.

Turning to Empire Manufacturing, that’s the first data point from September, and that’s always anecdotally important because we don’t want to see any steep drop off that might imply a loss of momentum.

Bottom line, this week gives us more color into the state of growth and inflation in August. We need to see both begin to accelerate if we are to hold out hope that we can see an economic reflation create a “rising tide” for stocks in Q4 ’17 or Q1 ’18.

Commodities, Currencies & Bonds

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In Commodities, the segment was mixed last week as refinery demand rebounded, helping oil rally but pressuring the products. In the metals, the copper rally took a breather but gold extended recent gains amid a weaker dollar and continued geopolitical angst. The commodity ETF, DBC, was basically unchanged on the week.

Metals were on the move last week as the falling dollar initially offered broad support to the space, but that changed on Friday when copper reversed sharply and finished the week lower for the first time since early July (it was the longest streak of weekly gains in a decade). Copper futures declined 2.53% on the week. The catalyst for the reversal was underwhelming Chinese Trade data that showed copper imports were unchanged M/M in August. The copper rally has been very pronounced, and was beginning to get extended, so the soft Chinese import data provided a good excuse for profit taking. For now, the primary trend in copper remains bullish; however, we could see some consolidation after the very strong eight-week run higher. Initial support lies between $2.90 and $2.95.

Gold rallied 1.59% thanks to a weaker dollar that was the result of central bank developments (the ECB), and more political uncertainty after lawmakers extended the debt ceiling. Additionally, geopolitical angst regarding North Korea and its apparent plans of another missile launch also kept a fear bid in the market last week. All those developments were bullish for gold, and like copper, the primary trend is still higher. Any resolution in the near term could see a profit-taking pullback like we saw in copper; however, the path of least resistance is still higher with a medium-term target of $1400/oz.

Turning to energy, the “Harvey Trade” continued to unwind as RBOB gasoline futures declined and oil futures churned higher thanks to the influence of refineries coming back online (demand for oil, more supply of products). WTI rose 0.44% and RBOB futures fell 7.27%.

Fundamentally, inventory and production data was largely written off last week as Harvey skewed the figures, but nearly all the US production gains for 2017 were wiped out thanks to shuts related to Harvey. Looking ahead, it will be important to see production rebound swiftly and close to completely, otherwise, the biggest headwind for oil in 2017 will be lifted and the fundamental backdrop for the energy market may not be as bearish going forward.

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Looking at Currencies and Bonds, the Dollar Index plunged to new 2017 lows last week while the euro surged to multi-year highs thanks to multiple events. The Dollar Index sank 1.7%.

The event most responsible for last week’s dollar decline was the ECB meeting, which was slightly hawkish. The announcement that QE tapering details will be given in October was the headline hawkish event, but equally, if not more important, was the fact that Draghi again didn’t “talk down” the euro. His refusal to address euro strength is being taken by the market as a tacit endorsement of the euro at 1.20, and that, more than anything, is what’s causing this relentless euro rally.

That will continue until 1) The ECB acknowledges the euro strength is a risk for growth, or 2) We get better inflation data here in the US.

Looking internationally, there was universal strength vs. the dollar. The yen surged 2% on a combination of dollar weakness and risk-off buying in the yen ahead of a potential North Korea missile launch. Meanwhile, the loonie also rose 2% after the Bank of Canada surprised markets and hiked rates 25 basis points.

Yet it wasn’t just the ECB that sent the dollar lower last week. The resignation of Fed Vice Chair Fischer, the three-month debt ceiling deal (which will cause a potentially bigger problem in December) and the deteriorating Cohn/Trump relationship (which reduces the chances for tax cuts) all weighed on the dollar, and more importantly, bond yields.

To that point, the most important thing that happened in markets last week was that the 10-year yield hit new 2017 lows, and the 10’s-2’s Treasury yield spread also hit 2017 lows. Both of those events imply 1) Slower economic growth and 2) Lower inflation on the horizon. That’s clearly not good for a market trading near 18X next year’s earnings.

Bottom line, the currency and bond markets continue to flash medium- and longer-term caution signs on the economy and the equity markets—and while not a reason to sell right now, those caution signs should not be ignored.

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Special Reports and Editorial

The ECB Decision Takeaways

Last week’s ECB decision was on the “hawkish” side for two reasons. First, Draghi specifically sighted an “autumn” release of the details of tapering of QE, so that means the October ECB meeting (not December). That was a mild hawkish surprise, but not really a shock.

Second, Draghi once again passed on the opportunity to “talk down” the euro, implicitly implying that the ECB does not mind its current strength.

He did make the vanilla comments that it must be “monitored,” but the important point is he gave no indication that the strong euro would cause the ECB to rethink tapering QE, and that’s de facto euro positive.

From a market standpoint, the impacts of this are clear; i.e., more of the same euro strength and dollar weakness. Near term, that dollar weakness will continue to be a mild tailwind on stocks, but it’s not a bullish gamechanger.

For Europe, the news is positive in an absolute sense. The ECB is going to taper QE because of better economic data, although the currency is a concern. From a position standpoint, while I think it to be long-term cheap, in the near term the dollar is making new lows, so that will be a headwind on HEDJ. It won’t be a headwind on EZU. Given I have a longer time frame, I am not selling HEDJ, in part because I believe the dollar is cheap and the euro is expensive.

However, if I were going to make a move, I’d likely keep the same overall allocation to Europe, and move some out of HEDJ and into EZU (at least in the near term). Again, for longer-term investors, this will result in short-term underperformance, but it doesn’t invalidate the “Long Europe” thesis.

Fischer & the Debt Ceiling: Not Market Positives

Two big news items last week were the resignation of Fed Vice Chair Fischer, and the agreement on a three-month debt ceiling extension/government funding deal.

Starting with the former, Fischer’s resignation makes the Fed very slightly more dovish (Fischer was a modest hawk) but really the future path of Fed interest rates depends a lot more on inflation data than it does Fed personnel.

From a market standpoint, the odds of a December rate hike appropriately declined slightly. But again, Fischer’s departure isn’t a dovish gamechanger, and if inflation metrics move higher between now and December we’ll still get a rate hike. From a stock standpoint, other than the temporary pop, I don’t see this news as an influence.

Turning to Washington, as usual, politicians have kicked the can down the road. On a positive note, we won’t see a debt ceiling drama or shutdown drama in late-September.

On a negative note, we likely will see an even more intense budget battle into the year-end. This will be all the more contentious because now tax cuts will be thrown into the mix, assuming Republicans have a concrete plan by then.

From a market standpoint, this is a very short-term positive in so much as it removes the possibility of a crisis over the next few weeks.

However, it sets up an even bigger potential negative into the end of the year. Bottom line, the debt ceiling/government funding agreement is not an incremental positive for markets, and we don’t expect it to push stocks higher from here.

In sum, both of Wednesday’s headlines had no real impact on our overarching macro view. We remain cautiously positive on stocks, but continue to believe that tax cuts and earnings hold the key to performance for the remainder of 2017.

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Bannon plots primaries against GOP incumbents

The following newsletter is an abridged version of Campaign Pro’s Morning Score. For an earlier morning read on exponentially more races — and for a more comprehensive aggregation of the day’s most important campaign news — sign up for Campaign Pro today. (http://ift.tt/1rYrnXl)

BANNON’S INSURGENCY —Bannon plotting primaries against slate of GOP incumbents” by Alex Isenstadt: “President Donald Trump’s closest allies are planning a slate of primary challenges against Republican senators, potentially undermining the party’s prospects in 2018 and further inflaming tensions between GOP leaders and the White House. … Leading the target list is Arizona Sen. Jeff Flake, an outspoken critic of the president who recently published a book lamenting the rise of Trump. Bannon is intent on unseating Flake, and David Bossie, the president’s 2016 deputy campaign manager and the president of the influential conservative group Citizens United, has embarked on an effort to recruit several potential primary challengers, including former Rep. Matt Salmon. The former congressman, however, has expressed reluctance to enter the contest.” Full story.

Story Continued Below

SPEAKER RYAN WATCH — “Trump’s deal with Democrats bolsters Ryan — for now” by Politico’s Rachael Bade and Kyle Cheney: “Donald Trump’s deal with Democrats last week — the latest setback for House Republicans in a year filled with disappointment — has opened a new rift within the GOP Conference over whether their president or their speaker is to blame. Some House conservatives have begun questioning Paul Ryan’s leadership after Republicans were forced to swallow a vote to increase the debt ceiling without corresponding spending cuts. Freedom Caucus leaders, already upset that Congress wasted months on the failed bid to repeal Obamacare, cornered Ryan (R-Wis.) after the House vote on the debt ceiling to tell him he needed to change his approach. … While most Republicans say Ryan’s hold on his post is secure, it’s unclear how long he can maintain his grip in the age of Trump. The GOP’s right flank is starting to agitate against Ryan and Senate Majority Leader Mitch McConnell (R-Ky.). And the speaker is caught in an often-impossible position between a fractious conference and an unpredictable president.” Full story.

CALIFORNIA DREAMING — “How California could jolt the 2020 presidential race” by Politico’s David Siders and Gabriel Debenedetti: “California is pushing forward with a plan to change the state’s primary date from June to March, a move that could scramble the 2020 presidential nominating contest and swing the early weight of the campaign to the West. … By hosting an earlier primary, California could immediately gain significant clout in the party’s nominating process, since the state’s proportionate delegate haul could prove decisive in a 2020 field that’s likely to be historically crowded.” Full story.

DAILY WAR EAGLE — “Trump promised Sen. Strange a rally, but it hasn’t happened yet” by Campaign Pro’s Daniel Strauss and Josh Dawsey: “President Donald Trump’s endorsement of Sen. Luther Strange was supposed to be the whole package: a tweet, a robocall and, at the right time, a packed campaign rally in Alabama like the one Trump enjoyed during the 2016 presidential campaign. Trump himself promised Strange that type of rally in a recent phone call the two had, according to people familiar with the call. … On Tuesday, he and Trump talked on the phone, during which the president reiterated his support and said he was aware that former White House chief strategist Steve Bannon was actively supporting [Roy] Moore.” Full story.

Days until the 2017 election: 57.

Days until the 2018 election: 421.

Thanks for joining us! You can email tips to the Campaign Pro team at sbland@politico.com, eschneider@politico.com, krobillard@politico.com, dstrauss@politico.com and mseverns@politico.com.

You can also follow us on Twitter: @politicoscott, @ec_schneider, @politicokevin, @danielstrauss4 and @maggieseverns.

MINNESOTA POLITICS — “Republican women consider runs for Minnesota office — but so far, few pulling trigger” by the Minnesota Star-Tribune’s Erin Golden: “A handful of Republican women considering major political bids in Minnesota in 2018 would be looking to buck a daunting historical trend: Their party has never chosen a woman to run for governor or U.S. senator. So far, the nine Republicans to join the open race for governor in 2018 are men. So is the one candidate so far for U.S. Senate, seeking to challenge DFL Sen. Amy Klobuchar. Both of the party’s candidates for attorney general are men, as are the state’s three members of Congress and all the declared GOP contenders so far for the other five House seats. That could still change — two Republican women told the Star Tribune they still might join the governor’s race, along with at least one considering a congressional bid. But it’s in notable contrast to the DFL, where three of the six declared candidates for governor next year are women.” Full story.

NOTHING TO SEE HERE — “US Sen. Elizabeth Warren says Democratic party is united, ‘ready to fight’” by The Springfield Republican’s Shannon Young: “Pushing back against claims that Democrats remain divided following the 2016 presidential contest, U.S. Sen. Elizabeth Warren, D-Mass., this week said the party is united and ‘ready to fight’ as it heads into the 2018 mid-term elections. … Instead, she argued, the real divisions exist between Democrats and Republicans. ‘One party in America said it was OK to roll back health care coverage for 25 million Americans and one party in America thinks that health care is a basic human right — I’m ready to go on that one,’ she said in an interview with the editorial board of The Republican on Friday.” Full story.

DISCUSSION TOPICS — “Not on the agenda at Michigan Republican Party Mackinac conference: President Donald Trump” by The Detroit Free Press’s Paul Egan: “Controversies surrounding the Republican president are captivating the country — and the world — and have some Republicans worried about how they will affect party fortunes in congressional midterms and other elections in 2018. But don’t look for those topics to be on the agenda when about 2,000 Republicans from Michigan and across the nation gather on Mackinac Island Sept. 22-24 for the Mackinac Republican Leadership Conference — a major policy confab held every two years. … Tax reform, repeal and replace of Obamacare, immigration and infrastructure ‘are important and worthy of conversations,’ said state party spokeswoman Sarah Anderson. But ‘unfortunately, we have a limited time for the conference, so there wasn’t a space for panels on those issues.’” Full story.

ADMINISTRATION SPEED READ — “A Month Has Passed Since Trump Declared an Opioid Emergency. What Next?” by The New York Times’ Maggie Haberman: “When President Trump announced in early August, following a presidential commission’s recommendations, that the opioid crisis was a “national emergency,” he called it “a serious problem the likes of which we have never had. A month has now passed, and that urgent talk has yet to translate into urgent action. While the president’s aides say they are pursuing an expedited process, it remains to be seen how and by what mechanism Mr. Trump plans to direct government resources. … In an interim report issued on July 31, Mr. [Chris] Christie’s commission recommended a declaration of a national emergency. In a statement that caught most of his advisers by surprise, and which contradicted what Mr. [HHS Secretary Tom] Price had said days earlier, Mr. Trump told reporters on Aug. 10 that he was moving forward.” Full story.

QUOTE OF THE DAY: “You don’t want to be in that path. That’s a path you don’t want to be in. We tried to warn everybody. For the most part, they’ve left, but that’s a bad path to be in.” — President Donald Trump in response to a question on Sunday about what message he would give to people in Hurricane Irma’s path.

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THE NEXT BIG FIGHT: the FAA bill — ALEX ISENSTADT on Bannon’s midterm play — FBI investigating Sputnik — KATTY KAY’s new show – SPOTTED at the U.S. OPEN — TIM and JENNI LIM welcome a daughter — B’DAY: Jeh Johnson

Good Monday morning. Today is the 16th anniversary of the Sept. 11 attacks. Nick Short (@PoliticalShort): “The Twin Towers on the night of September 10, 2001. 16 years. #NeverForget”. http://bit.ly/2vPcrn2

THE NEXT BIG FIGHT: THE FAA BILL. Now that Congress has averted a government shutdown and debt default, there’s one more big must-pass bill lingering out there before the end of the month: the reauthorization of the Federal Aviation Administration’s authority. Insiders tell us it could get loaded up, because it’s the last train out of the station this month. In Capitol Hill parlance, it could end up like a “Christmas tree,” as lawmakers try to attach everything to it. What might get added to it? It’s impossible to tell, but don’t be surprised if you see attempts to throw hurricane relief money onto it, or even language to deal with DACA. The administration has told people on the Hill that they shouldn’t even think about trying to bolster Obamacare by attaching cost-sharing reduction payments, according to multiple sources involved in legislative negotiations.

Story Continued Below

THE HOUSE canceled votes today due to Hurricane Irma. They’ll be back tomorrow. The Senate is in at 3 p.m.

**SUBSCRIBE to Playbook: http://politi.co/2lQswbh

SCOOP — BANNON’S MIDTERM PLAY — “Bannon plotting primaries against slate of GOP incumbents,” by Alex Isenstadt: “President Donald Trump’s closest allies are planning a slate of primary challenges against Republican senators, potentially undermining the party’s prospects in 2018 and further inflaming tensions between GOP leaders and the White House. The effort is being led by Steve Bannon, Trump’s bomb-throwing former chief strategist, who is launching an all-out war against Senate Majority Leader Mitch McConnell and the Republican establishment.

“Bannon has begun holding private meetings with insurgent challengers, vowing his support. He’s coordinating with conservative mega-donor Robert Mercer, who is prepared to pour millions of dollars into attacks on GOP incumbents. Bannon has also installed a confidant at an outside group that is expected to target Republican lawmakers and push the Trump agenda.

“The activity has alarmed senior Republicans, who worry it will drain millions of dollars from the party’s coffers to take on Democrats in the general election. McConnell has repeatedly expressed concern to the White House about the danger primaries pose to his members, stressing that it could imperil his narrow four-seat majority, according to three people with direct knowledge of the discussions.

“Bannon is paying little heed to those warnings. On Thursday, he huddled with Danny Tarkanian, an attorney who is challenging Sen. Dean Heller (R-Nev.), at the Capitol Hill townhouse that serves as a base of operations for Breitbart News, the conservative website that Bannon oversees. …

“Bannon has taken preliminary steps to establish a political structure that could be used in 2018 races. It was recently announced that his political adviser, Andrew Surabian, was leaving the White House to take a job at Great America Alliance, a pro-Trump outside group.” http://politi.co/2xeEoIu

DEPT OF ODD BEDFELLOWS: “Trial Lawyers and Breitbart Unite: Steve Bannon gets in bed with the plaintiff bar to elect Roy Moore,” by WSJ Editorial Board. http://on.wsj.com/2wUz37b

— THIS ISN’T the first time McConnell and Bannon have been on opposite sides in primary elections. But McConnell went undefeated in the 2014 and 2016 election cycles.

— BANNON “60 MINUTES” RECAP via WaPo’s Ashley Parker: http://wapo.st/2xVmIyGVideo of Bannon’s segments http://cbsn.ws/2wjCVwv

SPEAKER WATCH — “Trump’s deal with Democrats bolsters Ryan — for now,” by Rachael Bade and Kyle Cheney: “Donald Trump’s deal with Democrats last week — the latest setback for House Republicans in a year filled with disappointment — has opened a new rift within the GOP Conference over whether their president or their speaker is to blame. Some House conservatives have begun questioning Paul Ryan’s leadership after Republicans were forced to swallow a vote to increase the debt ceiling without corresponding spending cuts. Freedom Caucus leaders, already upset that Congress wasted months on the failed bid to repeal Obamacare, cornered Ryan (R-Wis.) last Wednesday to tell him he needed to change his approach. …

“Yet that appears to be the minority view within the conference. Trump’s surprise partnership with Democrats may have bolstered, at least temporarily, Ryan’s standing among rank-and-file Republicans. Many lawmakers rallied behind the speaker and directed their anger at the White House over the debt deal. Treasury Secretary Steven Mnuchin and budget director Mick Mulvaney were booed when they came to Capitol Hill to plead with Republicans to support the deal. ‘There’s a lot of disappointment in the decision that the president made, and the way our leadership was treated — that’s a sore spot,’ said Rep. Hal Rogers (R-Ky.).” http://politi.co/2vON70B

— “Why Ryan, Undercut by Trump, May Actually Emerge Stronger,” by NYT’s Sheryl Gay Stolberg: “Mr. Ryan declined to be interviewed. But his allies on Capitol Hill say that, despite the conservative pushback and raucous week, the speaker emerged with a stronger hand. By week’s end, tempers among even some of the angriest members of the Freedom Caucus had cooled, and Mr. Meadows insisted that the rumors of a coup in the offing were false. ‘I wouldn’t want his job for anything,’ he said. ‘I have a hard enough time keeping 40 members of the Freedom Caucus together.’” http://nyti.ms/2jgWbJG

THE ASSOCIATED PRESS’ JULIE PACE interviews SPEAKER PAUL RYAN at 10:45 a.m. on Wednesday. Tune in: http://bit.ly/2jhSBPp

THE REALITY — BLOOMBERG’S SAHIL KAPUR — “Trump Debt Limit Deal Undermines Trust Among GOP on Tax Overhaul”: “Not only has the deal sowed doubt among the GOP about its unpredictable president, but it’s also driving a wedge between Republicans and their leaders in Congress, just as the party is desperate to deliver on one of its top priorities.

“And the calendar is unforgiving. Congress needs to reauthorize funds for the children’s health insurance program and federal aviation programs before Sept. 30 and lawmakers are still trying to address Obamacare. In addition, they may need to provide additional hurricane relief funds after the devastation in Florida following Hurricane Irma prompted the state’s Senator Bill Nelson to push for Congress to approve another emergency aid package by mid-October.

“Republicans also have to agree on a 2018 budget resolution — a necessary step to unlock the procedural maneuver they intend to use to pass the tax plan with 50 votes in the Senate. The lack of details of a tax plan is frustrating members of the House Freedom Caucus, who are making clear they’re ready to effectively hold the budget resolution hostage until they get some specifics from their leaders.” https://bloom.bg/2vOUncL

****** A message from CTIA and America’s wireless industry: The global race to deploy 5G wireless is on—and America needs to win. Government action on spectrum and infrastructure policy will allow U.S. wireless companies to invest $275 billion, create more than 3 million jobs, and add $500 billion to the economy, according to Accenture. Learn more at CTIA.org. ******

THE LATEST ON IRMA …

— “Weakened Irma lashes Tampa Bay region; full impact unknown,” by AP’s Tamara Lush in Tampa: “A massive but weakened Hurricane Irma zeroed in on the Tampa Bay region early Monday after hammering much of Florida with roof-ripping winds, gushing floodwaters and widespread power outages. Irma continued its slog north along Florida’s western coast having blazed a path of unknown destruction. With communication cut to some of the Florida Keys, where Irma made landfall Sunday, and rough conditions persisting across the peninsula, many held their breath for what daylight might reveal.

“The monster storm measured more than 400 miles wide, and its winds of up to 130 mph sucked the ocean water out of bays, swamped much of downtown Miami and toppled at least three constructions cranes — two over downtown Miami and one in Fort Lauderdale. More than 3.3 million homes and businesses across the state lost power, and utility officials said it will take weeks to restore electricity to everyone.” http://bit.ly/2ePwYB7

— “Fears mount in Florida Keys over damage, possible deaths from Hurricane Irma,” by David Ovalle and David Goodhue in the Miami Herald: “[M]any in Key West seemed relieved that the damage from a Category 4 Irma was not much, much worse. ‘It’s not as bad as we thought,’ said [resident] Robert Phillips. ‘It’s just trees and foliage and cars.’ That wasn’t the case across the rest of the 110-mile island chain. In the Middle and Upper Keys — on the more savage right side of Irma’s 130-mph winds — the damage and storm surge appeared far more severe.

“Monroe County emergency managers hinted that they feared there could be fatalities. Emergency Management Director Martin Senterfitt, calling the destruction a looming ‘humanitarian crisis,’ said a huge airborne relief mission mounted by the Air Force and Air National Guard was already in the works. Among the services coming to the Keys are ‘disaster mortuary teams,’ he told a conference call on Sunday afternoon.” http://hrld.us/2wU8Siw

— “‘I feel like I’m in a sardine can’: Fraying nerves and feeling powerless as the storm finally arrives,” by WaPo’s Patricia Sullivan, Leonard Shapiro, Perry Stein and Joel Achenbach: http://wapo.st/2eXQeAc

— “At the Miami Herald, newsroom turns into shelter for reporters and their families,” by CNN’s Oliver Darcy in Miami: “Sleeping bags littered the newsroom. Mattresses lined conference room floors. A tent was erected in a far-off corner. As Hurricane Irma made landfall in south Florida, the offices of the Miami Herald played dueling roles: a working newsroom and a shelter for journalists and their families. ‘We told people if they had nowhere to go, to come here,’ Rick Hirsch, managing editor of the Herald, told CNNMoney. ‘If you intend to bring a pet, the official policy was don’t talk to me about it.’” http://cnnmon.ie/2wRAo0B

— @FOX13News: “SINGLE FILE, EVERYONE! Flamingos being ushered to safety at @BuschGardens, along with other animals Stay safe, everyone! #HurricaneIrma”. http://bit.ly/2eZNmma

FOR YOUR RADAR — “North Korea warns U.S. over sanctions push ahead of U.N. vote,” by Reuters’ Jack Kim in Seoul and Michelle Nichols at the UN: “North Korea warned the United States on Monday that it would pay a ‘due price’ for spearheading efforts for fresh sanctions on the regime following its latest nuclear test, which diplomats say the U.N. Security Council will vote on later in the day. But a U.S.-drafted resolution originally calling for an oil embargo on the North, a halt to its key exports of textiles and subjecting leader Kim Jong Un to a financial and travel ban appears to have been watered down to placate Russia and China, which both have veto powers, diplomats said. It no longer proposes blacklisting Kim and relaxes sanctions earlier proposed on oil and gas, a draft reviewed by Reuters shows. It still proposes a ban on textile exports.” http://reut.rs/2wjPfNf

SCOOP — “Sputnik, the Russian news agency, is under investigation by the FBI,” by Yahoo’s Michael Isikoff and Hunter Walker: “The FBI recently questioned a former White House correspondent for Sputnik, the Russian-government-funded news agency, as part of an investigation into whether it is acting as an undeclared propaganda arm of the Kremlin in violation of the Foreign Agents Registration Act (FARA). … Andrew Feinberg, the news agency’s former White House correspondent … confirmed to Yahoo News that he was questioned for more than two hours on Sept. 1 by an FBI agent and a Justice Department national security lawyer at the bureau’s Washington field office.” https://yhoo.it/2gVH4oh

UNDERSTANDING NIKKI HALEY — “Haley’s UN Brinkmanship Comes With Advice From Low-Key Adviser,” by Bloomberg’s Kambiz Foroohar: “Jon Lerner, a political strategist who helped get Haley elected twice as the Palmetto State’s governor, is the ambassador’s Washington-based deputy. While Haley has talked about the direct access she has to President Donald Trump, the 49-year-old Lerner serves as her eyes and ears on the ground in the nation’s capital: a critical role as Haley’s profile rises in an administration buffeted by leaks and turmoil. …

“In a rare public comment, Lerner described himself in an email as inspired by anti-Communist movements. ‘My hostility to anti-American authoritarian governments that began with anti-Communism remains my primary motivation,’ Lerner wrote. ‘That manifests itself today in places that include North Korea, Iran, Syria, Cuba, Venezuela, and Russia.’” https://bloom.bg/2xpXtIq

TRUMP’S MONDAY — THE PRESIDENT participates in a moment of silence at the White House at 8:45 a.m. He heads to the Pentagon around 9:15 for a ceremony. At 11 a.m., he receives a hurricane briefing, and then his schedule is clear for the rest of the day.

THE JUICE …

— KATTY KAY’S NEW SHOW: “Beyond 100 Days” launches today. Katty hosts from the U.S. and Christian Fraser co-hosts in London. From Kay: “If you want to know what the world makes of Trump, how he’s changing U.S. leadership and how it all connects to Brexit and European populism, this is essential viewing/dvr-ing. Weekdays 2 p.m. EST on BBC World News – here’s how to find”: http://bit.ly/2eZn9Et

— SPOTTED AT THE U.S. OPEN — per Morning Media: “CNN president Jeff Zucker and MSNBC president Phil Griffin, seated together at Friday night’s U.S Open semifinal match between Rafael Nadal and Juan Martin del Potro. Seated nearby: NBC News legend Tom Brokaw, and Discovery Communications CEO David Zaslav, who sat next to actor Robert Redford.”

WAPO’S BARRY SVRLUGA — “No joke, the Nationals have evolved into one of baseball’s best franchises”: “This isn’t just a one-time, feel-good product, not the 2012 team, which won a title for the first time just seven years after the Nationals arrived in town, just six years after the Lerner family bought them out from under the stewardship of Major League Baseball. This is a franchise that, on Sunday, won its 546th game over the past six seasons. The Dodgers are the only team with more. Their total: 547. Look out. Here come the Nats.” http://wapo.st/2xr5ugg

WHAT ANNA IS READING — “Miss America 2018: Miss North Dakota Cara Mund takes the crown,” by USA Today’s Sara M. Moniuszko: “Miss North Dakota Cara Mund won the title of Miss America 2018 Sunday night — the first from her state to take the Miss America crown.” https://usat.ly/2wTiB8v

SUSAN GLASSER on the status of the Democratic Party for Politico Magazine. “‘People Don’t Really Know What We Stand For’” — she speaks to Tom Perez, Jess O’Connell, Neera Tanden, Mitch Stewart, and Michael Kazin http://politi.co/2vZHXTA

TRUMP’S WHITE HOUSE — NYT A1, “Where Trump’s Hands-Off Approach to Governing Does Not Apply,” by Ben Protess, Danielle Ivory and Steve Eder: “The aggressive regulatory effort, which runs counter to the Trump administration’s less-is-more credo about government meddling, has led to policy changes related to gun ownership, gay rights, reproductive choices, immigration and other divisive political issues, according to a New York Times review of government documents and court records, as well as interviews with more than four dozen people involved in or briefed on the efforts. The overhaul is unfolding behind the scenes in Washington at agencies like the Health and Human Services Department, where new rules about birth control are being drafted, and in federal courtrooms, where the Justice Department has shifted gears in more than a dozen Obama-era cases involving social issues.

“The turnabout stems in part from lobbying by evangelical Christians and other conservative groups. In interviews, these groups said they have regular discussions on domestic and foreign policy with the administration — more so than during the presidency of George W. Bush, the last Republican to occupy the White House and someone who identified as a Christian conservative.” http://nyti.ms/2ePBuzm

— “A Month Has Passed Since Trump Declared an Opioid Emergency. What Next?,” by NYT’s Maggie Haberman. http://nyti.ms/2ePTud5

MCCLATCHY’S ANITA KUMAR — “Trump promised not to work with foreign entities. His company just did”: “A major construction company owned by the Chinese government was hired to work on the latest Trump golf club development in Dubai despite a pledge from Donald Trump that his family business would not engage in any transactions with foreign government entities while he serves as president.

“Trump’s partner, DAMAC Properties, awarded a $32-million contract to the Middle East subsidiary of China State Construction Engineering Corporation to build a six-lane road as part of the residential piece of the Trump World Golf Club Dubai project called Akoya Oxygen, according to news releases released by both companies. It is scheduled to open next year.” http://bit.ly/2ePYZIL

BUSINESS BURST — “How Kirkland Signature Became One of Costco’s Biggest Success Stories,” by WSJ’s Sarah Nassauer in Issaquah, Washington: “Kirkland Signature, Costco’s store brand, is challenging manufacturers hoping to earn or retain a coveted spot at the warehouse retailer. Since 1995, Costco has used its Kirkland products to attract shoppers, building a reputation for quality and low prices on milk, toilet paper, men’s shirts and golf balls bearing the unassuming red logo. About a quarter of Costco’s $118.7 billion in annual sales come from Kirkland Signature products, and the percentage is growing, company executives say.” http://on.wsj.com/2wRBWHX

****** A message from CTIA and America’s wireless industry: Tomorrow’s 5G networks will create 3 million jobs, add $500 billion to the economy, and fuel innovation and entrepreneurialism across every sector. If policymakers move quickly to release more spectrum and modernize infrastructure rules, the wireless industry stands ready to invest $275 billion to build these next-gen networks, according to Accenture. This will drive breakthrough advancements in remote health care, connected vehicles, energy, education and beyond—making our lives better and safer. But the race to deploy 5G wireless networks is underway—and we’re at a critical moment. The EU, China, Japan, South Korea and others are doing everything they can to win. If policymakers act now, the U.S. can continue our global leadership in wireless. Learn how at CTIA.org. ******

WHAT CHRIS COX IS READING — “Antifa, white supremacists exploit loose gun laws,” by Josh Meyer: “Domestic extremist groups ranging from white supremacists to their rival ‘antifa’ anarchists are increasingly exploiting loose gun control laws to show up at emotionally charged rallies with assault rifles and other high-powered weapons, increasing the likelihood of an explosive clash in an American city, according to law enforcement officials. What makes the current threat environment especially combustible are open carry laws in many states that allow civilians to display virtually any gun in public that they want, often with no permit, training or background check required, according to federal and state law enforcement officials who are closely monitoring extremist groups. ‘Why would you let someone bring an AR-15 to a hate rally?’ former FBI supervisory special agent James Gagliano asked. ‘It’s absolute insanity.’” http://politi.co/2fd0rFv

MEDIAWATCH — “As Irma’s Winds Rise, So Does a Debate Over TV Storm Reporting,” by NYT’s Sopan Deb: “Early Sunday morning, Bill Weir, a veteran CNN correspondent, was talking to the anchor Chris Cuomo in the middle of a live shot in Key Largo, Fla. He could barely stand up straight in the lashing winds of Hurricane Irma. At one point, he was nearly blown over by a gust. As video of the incident spread on social media, criticism mounted. ‘Why do these news networks feel the need to put these reporters out there?’ read one tweet. Another said: ‘This is not safe. Lead by example.’ Others pointed out that reporters were standing in conditions that they were advising residents to stay out of. Even Mr. Cuomo acknowledged the criticism: ‘There is a strong argument to be made that standing in a storm is not a smart thing to do.’” http://nyti.ms/2vZSTAz

— Natalie Valdes (@nvaldes7): “So Irma just showed up in Naples. @KerryNBC live on @MSNBC”. http://bit.ly/2gXxdL4

SPOTTED outside Arthur Ashe stadium in New York for the U.S. Open finals Sunday: Sen. Mark Warner (D-Va.), Eric Cantor, Colin Reed and Webber Steinhoff … Sean Spicer on the 3 p.m. Sunday Acela from D.C. to NYC in first class … the entire Washington Nationals team celebrating clinching the NL East in the private room at The Salt Line … Ben Rhodes and Ann Norris and Samantha Power and Cass Sunstein at a screening at the Toronto Film Festival of Greg Baker’s “The Final Year,” a film about President Obama’s foreign policy during his final year in office.

WELCOME TO THE WORLD — Jennifer Pierotti Lim, co-founder of Republican Women for Progress, and Tim Lim, partner at Bully Pulpit Interactive, “are happy to announce the birth of their daughter Penelope Ruth Lim at 6:09 a.m. on Friday … Baby and momma are doing great!” Pic of Penny in her own Playbook “Spotted” onesie http://bit.ly/2xql3Fd

WEEKEND WEDDING – Pool report: “Danielle Ivory, a New York Times investigative reporter focusing on regulation in the Trump presidency, on Saturday married Josh Sibble, an intellectual property lawyer for the firm Baker Botts. Attendees at the ceremony included her editor, Dean Murphy, and fellow Times reporters Ben Protess and Steve Eder (who co-bylined this story with Danielle, http://nyti.ms/2ePBuzm) which ran online the same day as the NYT wedding announcement (http://nyti.ms/2gWeAKX) and the post-wedding brunch/apple picking). The Times’ Rebecca Ruiz toasted the couple, and Matthew Chayes of Newsday officiated the ceremony, held at Liberty View Farm in Highland, N.Y.”

OUT AND ABOUT — Philanthropist and businesswoman Adrienne Arsht hosted a reception on Sunday at her Massachusetts Avenue Heights mansion in honor of the new president of GW, Thomas LeBlanc. LeBlanc is the university’s 17th president.

SPOTTED: Bret Baier and wife Amy, Chris Isham, Michelle Kosinski, Rep. Mark Meadows (R-N.C.), Al Cardenas, Ana Navarro, Nina Totenberg, Michael LaRosa, Don and Shannon McGahn, Capricia and Dr. Rob Marshall, Roxanne Roberts, Ann Hand, Deborah Rutter, Julie Kent, Tony Podesta, Michael Chertoff, Amb. John Negroponte, Catherine Reynolds, Patrick Steel and Lee Satterfield, Stuart Holliday, Gary Knell, Colombian Amb. Camilo Reyes, Jason Marczak, Amb. Edward “Skip” Gnehm, Kuwaiti Amb. Salem Abdullah Al-Sabah and his wife Rima Al-Sabah

BIRTHDAY OF THE DAY: former DHS Secretary Jeh Johnson, now a partner at Paul, Weiss, is 6-0. How he’s marking the day: “Since my birthday is 9/11, I haven’t celebrated on that day since 2001. The memory from 2001 overwhelms the birthday. The last several years I have participated in 9/11 observances – 2010, 2011, 2012 at the Pentagon, 2014 and 2016 at the WTC, 2015 in Shanksville. By the way, of all the memorials to victims of terrorism I’ve visited, Shanksville is in my personal opinion the most moving. If I celebrate my birthday, I now do it on days other than 9/11. This month my wife and I both turn 60, so we are having a blow-out dance party for about 300 people on September 23.” Read his Playbook Plus Q&A: http://politi.co/2wjzvd9

BIRTHDAYS: WaPo’s Ben Terris … Markos Moulitsas, founder of Daily Kos, co-founder of Vox Media, and author of “The Resistance Handbook: 45 Ways to Fight Trump” … Nels Ericson … Ted Olson … Fox Business’ Maria Bartiromo … Syrian President Bashar al-Assad … WashPost fashion critic Robin Givhan … Jon Downs, a founding partner of FP1 Strategies (hat tip Ryan Williams) … former Sen. Daniel Akaka … Politico’s Joe Schatz and Gloria Pazmino … Pete Breen, senior producer at NBC’s “Today Show” … Jon Meyersohn, co-executive producer of History Channel’s “Left Right” (h/t son Nathaniel) … Ian Solomon … Gaylord Lanham … Marit P. Babin Stout … Lee Verstandig … Liz Kennedy … Maura Hogan … Colleen Kearns … Arianne Price … Michael Hardaway of Rep. Hakeem Jeffries’ (D-N.Y.) office is 36 (h/t Jenell Brownell) … Rep. Tim Murphy (R-Pa.) … Steve Rose … Sharon Gallagher, principal and co-founder of Sage Communications (h/ts Beck and Haber) … former Sen. Bob. Packwood (R-Ore.) … Kara Nelson … Sammy Yaish … Clare Rizer … Paige Kerr …

… Gordon Bronson, director of public affairs at WeWork … Bill Cunningham … Patrick Rheaume … Dahl Burger, daughter of Tim and Kiki … Carter Barrett … Cecily Cutbill … Cyrus Artz … Walter Alarkon … Paul Florence … Tom Boyd … former Rep. Brad Ellsworth (D-Ind.) … Claude Marx, who covers antitrust policy for “FTC Watch” and frequent winner of the daily Politico Huddle trivia question (h/t Chris Colford) … Emy Lesofski … Robert Favela … Julie Goon, SVP of public affairs at Anthem … Amanda Hughes … Diane Tomb … Jose Fourquet … Sarah Weeldreyer … Elizabeth Feldman … Rob Lalka … Maya Spanderashvili … Kyle Gerron … Karen E. Watson … NBC alum Brooke Hart, now corporate director of comms at Sierra Nevada Corporation … Dianna Plantan … Bruce Koeppl, “proud former bartender at the Iowa City Brown Bottle” … Leticia Reyes … Wendy Kloiber (h/ts Teresa Vilmain) … Brian De Palma … Roxann Dawson … Virginia Madsen.

****** A message from CTIA and America’s wireless industry: We need new rules for new 5G networks. New policies that will allow the U.S. to win the race to 5G and enable breakthrough advancements in healthcare, transportation, energy and more. First, a pipeline of low-, mid-, and high-band spectrum will help meet today’s mobile needs and enable the 5G networks of tomorrow. Second, every level of government must modernize their rules for the building of small cell wireless infrastructure. Third, permanent and common sense federal regulations for interstate services like mobile broadband will preserve an open internet and protect consumer privacy while promoting innovation and investment. Finally, America’s tax structure must be updated to spur billions of dollars in new 5G investment. Learn more about how wireless is working to invest in America’s future at CTIA.org. ******

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Posted in news | Tagged , , , | Comments Off on THE NEXT BIG FIGHT: the FAA bill — ALEX ISENSTADT on Bannon’s midterm play — FBI investigating Sputnik — KATTY KAY’s new show – SPOTTED at the U.S. OPEN — TIM and JENNI LIM welcome a daughter — B’DAY: Jeh Johnson

IRMA makes landfall in Florida — THE LIMITS of being a TRUMPOCRAT — FIRST IN PLAYBOOK: TRUMP’s week ahead — IVANKA and JARED dine with NICK AYERS — NICK MERRILL and VAL GALASSO’s big night

IRMA’S WRATH — FROM THE MIAMI HERALD’s live updates — 10:05 a.m.: “Tropical storm-force winds and extreme gusts are pummeling Coral Gables, bending trees to unnatural, deformed angles or pushing them to the ground. The city’s trademark canopy is being shredded, creating impassable streets covered with branches or blocked by downed trees.” … 9:45 a.m.: “Shortly after Category 4 Hurricane Irma made landfall in the Florida Keys Sunday morning, 1,378,773 Florida Power & Light customers were without power.” …

9:35 a.m.: “Miami-Dade police halted responding to calls Sunday morning after Hurricane Irma brought hurricane-strength winds to the county.” … 9:30 a.m.: “The center of fierce Hurricane Irma, pushing a dangerous flood of ocean water, made landfall early Sunday morning on Cudjoe Key, just a short drive drown the Overseas Highway from Key West.” … 8:30 a.m.: “Storm waters are surging in Key West as Hurricane Irma’s powerful eyewall moves into the Lower Keys. Storm surge could rise as high as 10 feet, which authorities describe as life-threatening.” http://hrld.us/2xTKEm8

Story Continued Below

— Mike Theiss, National Geographic photographer, (@MikeTheiss): “Eyewall and Storm Surge !! #HurricaneIrma #KeyWest”. Video http://bit.ly/2eXKtlL

— @CNN: “This is what Miami Beach looked like Saturday night as the strong outer bands from Hurricane Irma moved onshore”. 28-second video http://bit.ly/2wifXWE

–AP at 10:12 a.m.: “ATLANTA (AP) – First-ever tropical storm warning issued for Atlanta as Hurricane Irma hits Florida on its way toward Georgia.”

SPOTTED: Ivanka and Jared at dinner last night with Nick Ayers at Siren, the new restaurant in the Darcy Hotel on Rhode Island Avenue.

TRUMP’S WEEK — A FEW HIGHLIGHTS from the White House. MONDAY: The president and first lady observe a moment of silence for 9/11 Monday, and go to a ceremony at the Pentagon. VP Mike Pence is going to Shanksville, Pennsylvania. TUESDAY: Malaysian Prime Minister Najib Abdul Razak visits the White House. WEDNESDAY: Trump is meeting with Sen. Tim Scott (R-S.C.).

FROM THE WHITE HOUSE at 10:11 a.m.: “POTUS spoke to governors of Alabama, Georgia, [South] Carolina and Tennessee this morning. He’s spoken numerous times to [Florida] Governor [Rick] Scott and Senator [Marco] Rubio of Florida over the last week as has [Chief of Staff] Gen. [John] Kelly. The Chief of Staff also spoke to Senator [Bill] Nelson of Florida this morning. The President and Vice President are also receiving a briefing this morning.”

CONGRESSIONAL LEADERS are closely monitoring the delays and cancellations at Delta’s hub, Atlanta’s Hartsfield International Airport, as they decide whether they can hold votes tomorrow. Many lawmakers from Florida are going to have a tough time getting to D.C.

Good Sunday morning. THE LIMITS OF BEING A TRUMPOCRAT … Let’s try not to divine whether PRESIDENT DONALD TRUMP will continue to work with Democrats at the expense of Republicans. Nobody knows the answer to that. Let’s also take a deep breathe and recognize that Trump didn’t cut some transformative deal for the history books. He extended the debt limit and government funding by three months and agreed to billions to aid hurricane victims. Barack Obama worked with Republicans to slash government spending. Trump didn’t do anything like that. What Trump did do last week, whether he knows it or not, is create a governing coalition of 150 Republicans and all Democrats. This won’t work everywhere. Let’s explore where insiders think they have a shot, and where they don’t:

— INFRASTRUCTURE: The White House has said nothing about what it would like to do when it comes to a massive infrastructure bill. But Trump has said he wants to spend lots of money. A chunk of Republicans — the Freedom Caucus and other fiscal conservatives — won’t be interested in a bunch of unpaid-for deficit spending. But there are moderates in the Senate and House GOP who, presented with the right package, could see benefits in a large-scale public works project. Republican lawmakers from upstate New York, the Midwest and even the outer edges of big cities would also likely be on board. The country’s crumbling infrastructure has long been an issue that Democrats have tried to take on. Crafted the right way, not only moderate Democrats, but others could also support an infrastructure package. This could be an area where Trump finds natural allies in both parties.

— HEALTH CARE: It’s difficult to truly understand what Trump wants to do when it comes to health care, since he has been on many sides of the issue. But if he wants Democratic cooperation, he’d have to scrap pushing for Obamacare repeal and back a more limited plan to enact fixes. This would infuriate some Republicans, who are angry enough that, nine months into an all Republican Washington, Obamacare is still ticking. Lawmakers and lobbyists aren’t optimistic that Trump can find enough common ground to get Republicans and Democrats on the same page.

— TAXES: Democrats have been completely shut out of the tax reform discussions. The only people resembling Democrats in the room are Gary Cohn and Steven Mnuchin, two Trump administration officials who have donated to Democrats throughout their lives. It would take a miracle to change course at this point. A REMINDER: We are far from tax reform becoming a reality. Both chambers need to pass a budget, and we have not seen a shred of paper from the closed-door tax meetings.

— BASIC GOVERNANCE AND THE WALL: Democrats and Republicans can keep the lights on together — that much we’ve seen. They can lift the debt ceiling, if there are no legislative riders. Here’s where Trump could run into a major problem. We’re not sure if you’ve heard but the president wants to build a wall on the border with Mexico. He will not be able to do that with Democrats — they are a hard no on a border wall. Can he strike some sort of deal to put the DREAM Act into law in exchange for an uptick border security? Sure. But that would be awfully tricky.

MR. PRESIDENT — YOU STILL HAVE TO BE NICE TO MCCONNELL AND RYAN. Why? Because Democrats are in the minority in both chambers and have extremely limited ability to bring bills to the floor.

FROM 30K FEET — NYT’S PETER BAKER: “Bound to No Party, Trump Upends 150 Years of Two-Party Rule”: “President Trump demonstrated this past week that he still imagines himself a solitary cowboy as he abandoned Republican congressional leaders to forge a short-term fiscal deal with Democrats. Although elected as a Republican last year, Mr. Trump has shown in the nearly eight months in office that he is, in many ways, the first independent to hold the presidency since the advent of the current two-party system around the time of the Civil War.

“In recent weeks, he has quarreled more with fellow Republicans than with the opposition, blasting congressional leaders on Twitter, ousting former party officials in his White House, embracing primary challenges to incumbent lawmakers who defied him and blaming Republican figures for not advancing his policy agenda. On Friday, he addressed discontent about his approach with a Twitter post that started, ‘Republicans, sorry,’ as if he were not one of them, and said party leaders had a ‘death wish.’ …

“None of which means that Mr. Trump has suddenly transformed himself into a center-hugging moderate. More situational than ideological — critics would say opportunist — Mr. Trump adjusts to the moment, and his temporary alignment with Democrats could easily unravel tomorrow. The deal he cut, after all, merely postponed a fight over spending and debt for three months. It did not resolve any substantive disagreements.” http://nyti.ms/2wigEPH

WAPO’S TAKE — “‘Trump betrays everyone’: The president has a long record as an unpredictable ally,” by Ashley Parker and Phil Rucker: “President Trump prepared for the pivotal meeting with congressional leaders by huddling with his senior team — his chief of staff, his legislative director and the heads of Treasury and the Office of Management and Budget — to game out various scenarios on how to fund the government, raise the debt ceiling and provide Hurricane Harvey relief. But one option they never considered was the that one the president ultimately chose: cutting a deal with Democratic lawmakers, to the shock and ire of his own party.

“In agreeing to tie Harvey aid to a three-month extension of the debt ceiling and government funding, Trump burned the people who are ostensibly his allies. The president was an unpredictable — and, some would say, untrustworthy — negotiating partner with not only congressional Republicans but also with his Cabinet members and top aides. Trump saw a deal that he thought was good for him — and he seized it.” http://wapo.st/2wSD91d

— DESPITE ALL THE GOP HAND-WRINGING, senior GOP aides say that everyone is being too dramatic and that lawmakers need to take a deep breath. This middle-of-the-road stuff is not permanent.

****** A message from Hewlett Packard Enterprise: How are Hewlett Packard Enterprise‘s supercomputers helping create the future in science, medicine and national security? Learn more: http://ift.tt/2w02v9q ******

THE LATEST ON HURRICANE IRMA …

AP’S IRMA LEDEALL — “‘Pray for everybody’: Irma begins its assault on Florida,” by Tamara Lush and Jay Reeves in St. Petersburg, Florida: “Announcing itself with roaring 130 mph winds, Hurricane Irma plowed into the mostly emptied-out Florida Keys early Sunday for the start of what could be a slow, ruinous march up the state’s west coast toward the heavily populated Tampa-St. Petersburg area. … With an estimated 127,000 huddling in shelters statewide, the storm lashed the low-lying string of islands with drenching rain and knocked out power to over 1 million customers even hundreds of miles from Irma’s center.

“About 30,000 people heeded orders to evacuate the Keys as the storm closed in, but an untold number refused to leave, in part because to many storm-hardened residents, staying behind in the face of danger is a point of pride. While the projected track showed Irma raking the state’s Gulf Coast, forecasters warned that the entire Florida peninsula — including the Miami metropolitan area of 6 million people — was in extreme peril from the monstrous storm, almost 400 miles wide. Nearly 7 million people in the Southeast were warned to get out of the storm’s path, including 6.4 million in Florida alone.” http://bit.ly/2xTumcW

— JOHN DICKERSON speaks with SEN. MARCO RUBIO (R-FLA.) on CBS’S “FACE THE NATION”: DICKERSON: “Senator, you and I have talked over the years have talked about trust in government and people losing faith in their government. Do you see any of that? I mean are people not taking things seriously because sort of either because of crying wolf or because they lost faith in in voices of authority on these kinds of things?” RUBIO: “No I can’t say that in this case. I really can’t. I think that people have really responded. You see an enormous amount of people have acted. The most massive evacuation I think in the history of the state, millions of people have moved. And I think coming in the aftermath of those images from Harvey people have really jumped on it.

“So I think the bigger concern that we have is we’ve got — this is a very unique situation. The whole state is impacted. A lot of the relief efforts are being directed from places that now themselves are in, in the path of, of the storm. And we have a lot of people for example that left South Florida, that drove to Orlando, or Tampa who are now figuring out maybe I need to go back to Miami or something or, or Fort Lauderdale or Palm Beach. This is no time to be on the road. This is a very unique storm because of its size and scope. You usually are able to say that there’s some safe place in the state that you can go to. In this particular case, virtually the entire state is being impacted by the storm.”

— @PascoSheriff: “To clarify, DO NOT shoot weapons @ #Irma. You won’t make it turn around & it will have very dangerous side effects”.

— “Weather Channel Goes Into Overdrive Covering Back-to-Back Hurricanes,” by NYT’s David Gelles: “The Weather Channel averaged nearly 1.3 million viewers during prime time over the first half of last week, up sharply from an average of 150,000 viewers during the last week of July, when the weather wasn’t a story, according to Nielsen.” http://nyti.ms/2ePhA7J

FLORIDA FRONT PAGESMiami Herald: “Damage from Irma could surpass Andrew’s aftermath” http://bit.ly/2wSFS9bTampa Bay Times: “READY OR NOT — Irma is projected to hit Tampa Bay today, and ‘This is a killer hurricane.’” http://bit.ly/2vO1dPGNaples Daily News: “BRACE FOR IMPACT — Category 4 Irma Could Smash Southwest Florida Sunday” http://bit.ly/2eP2e2W Tallahassee Democrat: “STRIKING DISTANCE” http://bit.ly/2vOjiNJSouth Florida Sun Sentinel: “IN IT TOGETHER” http://bit.ly/2wT12UN

… Florida Today of Melbourne: “STATE OF FEAR — 15 pages of Hurricane Irma coverage inside” http://bit.ly/2xTZPeTSarasota Herald Tribune: “IRMA COMING — Residents urged to be ready for a storm as big as our state” http://bit.ly/2vNVDN3Panama City News Herald: “HERE SHE COMES — Mainland U.S. braces for massive Irma” http://bit.ly/2xUmVSyPensacola News Journal: “Governor Warns of Irma’s Storm Surge” http://bit.ly/2wQMJSK

POLITICO INVESTIGATION — “How U.S. News college rankings promote economic inequality on campus: Once ladders of social mobility, universities increasingly reinforce existing wealth, fueling a backlash that helped elect Donald Trump,” by Benjamin Wermund: “America’s universities are getting two report cards this year. The first, from the Equality of Opportunity Project, brought the shocking revelation that many top universities, including Princeton and Yale, admit more students from the top 1 percent of earners than the bottom 60 percent combined. The second, from U.S. News and World Report, is due on Tuesday — with Princeton and Yale among the contenders for the top spot in the annual rankings. The two are related: A POLITICO review shows that the criteria used in the U.S. News rankings — a measure so closely followed in the academic world that some colleges have built them into strategic plans — create incentives for schools to favor wealthier students over less wealthy applicants.” http://politi.co/2xXgLlL

FOR YOUR RADAR — “NATO’s Stoltenberg says North Korea’s ‘reckless behaviour’ requires global response,” by Reuters: “North Korea’s ‘reckless behaviour’ is a global threat and requires a global response, the head of the NATO military alliance said on Sunday. … ‘The reckless behaviour of North Korea is a global threat and requires a global response and that of course also includes NATO,’ NATO head Jens Stoltenberg said in an interview with BBC television. Asked whether an attack on the U.S. Pacific territory of Guam would trigger NATO’s Article 5, which requires each member of the alliance to come to the defence of any other, Stoltenberg said: ‘I will not speculate about whether Article 5 will be applied in such a situation.’” http://reut.rs/2jfb2Ez

— “Vast new intelligence haul fuels next phase of fight against Islamic State,” by LATimes’ W.J. Hennigan: “U.S. intelligence analysts have gained valuable insights into Islamic State’s planning and personnel from a vast cache of digital data and other material recovered from bombed-out offices, abandoned laptops and the cellphones of dead fighters in recently liberated areas of Iraq and Syria. In the most dramatic gain, U.S. officials over the last two months have added thousands of names of known or suspected Islamic State operatives to an international watch list used at airports and other border crossings. The Interpol database now contains about 19,000 names. The intelligence haul — the largest since U.S. forces entered the war in mid-2014 — threatens to overwhelm already stretched counter-terrorism and law enforcement agencies in Europe.” http://lat.ms/2jfu8dI

INSIDE THE WHITE HOUSE — “Former Sessions aides chart different paths in Trump’s White House,” by Andrew Restuccia, Nancy Cook, and Josh Dawsey: “In Donald Trump’s White House, there are few tales about power more instructive than the story of Jeff Sessions’ two former top aides. Both Stephen Miller, Trump’s senior policy adviser, and Rick Dearborn, a White House deputy chief of staff, started out in the same place – as top congressional aides in Jeff Sessions’ Senate office. Together, they worked as Trump campaign advisers, and then won senior administration jobs.

“But while Miller has rapidly accumulated power in the West Wing by personally advising the president on high-profile policy questions like immigration and publicly defending Trump on television and in the briefing room, Dearborn has become increasingly marginalized, having struggled to form a close bond with the president, the new chief of staff and Trump’s family

“Their diverging stock in the administration offers a case study in how to thrive in Trump’s West Wing. Among the lessons: The president often responds to aides who mirror his big personality, while wallflowers tend to get ignored. And the president deeply values loyalty to himself, with little interest in the relationships top aides and other staffers bring into the West Wing. But getting close to the president has its risks, as the long list of former Trump White House aides shows.” http://politi.co/2xdYqD2

SUNDAY BEST …

SEVERAL SUNDAY SHOWS were preempted due to the storm. NBC’s “Meet the Press” and ABC’s “This Week” both turned to storm coverage.

JAKE TAPPER speaks with SEN. JOHN MCCAIN (R-ARIZ.) on CNN’s “STATE OF THE UNION”: TAPPER: “I hope I don’t run this clip for another 50 years, but how do you want the American people to remember you?” MCCAIN: “He served his country. And not always right. Made a lot of mistakes. Made a lot of errors. But served his country, and I hope we can add, honorably.” The clip http://snpy.tv/2xXJFSD

— TAPPER: “You went through chemo and radiation to fight this cancer. When do you find out if it worked?” MCCAIN: “On Monday we will take a MRI, but so far all indications are very good. But again I’m not trying to paint this as a rosy picture. This is a very virulent form of cancer, it has to be fought against. We have new technologies … that make chances much better. But Jake, you know, every life has to end one way or another. I think it was the playwright [William Saroyan] … he said I always knew that no one could live forever but I thought there might be one exception. You gotta have joy, joy. Listen, those joyful memories of the campaign in 2000 are some of the most enjoyable times of my life. We were the underdogs, we were fighting our way up, we went to Sedona, you remember, everything was so magic about that campaign.”

REP JIM JORDAN (R-OHIO) to CHRIS WALLACE on “FOX NEWS SUNDAY”: @FoxNewsSunday: “.@Jim_Jordan on his confidence in @SpeakerRyan: We meet with him every week, no one is talking about changing leadership.”

GEORGE STEPHANOPOULOS speaks to FLORIDA GOV. RICK SCOTT on ABC’S “THIS WEEK”: STEPHANOPOULOS: “What is your biggest worry right now?” SCOTT: “My biggest worry is the people that didn’t evacuate and they don’t understand the risk of the storm surge. George, last year, we got storm surge up in the panhandle. And this water just comes in. And it just fills up your house. And then it goes out. And people — this lady — I can tell you a story about a lady, she was — she wanted to stay because of her pets. She was in a one-story house. The water got to three feet, she knew she wouldn’t survive. Thank god when she left her house to try to get away, there was a high-water vehicle just leaving and she got — she survived. Of course, her pets didn’t. But, I just hope people understand that this storm surge is just deadly.”

THE JUICE …

NICK AND VAL’S NIGHT — “Valery Galasso, Nicholas Merrill” — N.Y. Times: “The bride, 31, is a senior policy adviser in the office of Gov. Andrew M. Cuomo. From 2010 to 2015, she served in the Obama administration in Vice President Joseph R. Biden Jr.’s office of legislative affairs. She graduated from the University of Connecticut and received a master’s degree in public policy from Johns Hopkins. … The groom, 34, is the communications director in the office of Hillary Clinton in New York. He has worked for Mrs. Clinton since 2007, and was the traveling press secretary for her 2016 presidential campaign. He graduated from Skidmore College in Saratoga Springs, N.Y.” With pic http://nyti.ms/2xTK5c0

— SPOTTED: Hillary Clinton, Huma Abedin, Jon Davidson, Bari Lurie and Jeff Westerberg, Michael Kives, Brian Fallon, Heather Samuelson and Mitch Herckis, Sara Latham (who was in from London), Rachel Kelly, Adrienne Elrod, Angel Urena, Christina Reynolds, De’ara Balenger, Connolly Keigher, Bob Barnett and Rita Braver, Dan Schwerin, Mike Feldman, Tina Flournoy, Opal Vadhan, Rob Russo, Matt McKenna, Kamyl Bazbaz, Jason Rahlan. Philippe Reines and Nick’s mom Becky hosted the event.

FIRST IN PLAYBOOK: SOUTH BEND, INDIANA, MAYOR PETE BUTTIGIEG is in Des Moines to speak at Progress Iowa’s Corn Feed: HERE IS WHAT HE’LL SAY: “Nothing about politics is theoretical for me. I’ve sat with loved ones facing cancer and tried to figure out what we would do if Congress kicks them off Obamacare. I’ve looked into the eyes of an 8-year old American boy who lost his father to deportation and tried to tell him things were going to be okay. I’ve called 911 on a young man having an overdose, and rolled him over so he wouldn’t choke to death.

“I’ve stood in a basement flooded by extreme rainfall hitting South Bend in just the way scientists have warned us about for decades. And I’ve carried a weapon in a foreign land on the orders of an American president. See, when Donald Trump and his sons were working on Season 7 of Celebrity Apprentice, I was driving and guarding convoys outside the wire in Afghanistan.

“I had a lot of different responsibilities, but the job that mattered most was to make sure the men and women in my vehicle got where they were going, alive. And when they got in my vehicle, they didn’t care if I was a Democrat or a Republican. They cared about whether I had selected the route with the fewest IED threats, not whether my immigrant father was documented or undocumented. They cared about whether my M-4 was locked and loaded and whether I knew how to use it, not whether I was going home to a girlfriend or a boyfriend. They just wanted to get home safe, like I did.” The full speech http://politi.co/2wSLr9n

KATY TUR on the SUNDAY N.Y.T. OP-ED PAGE: “The Trump Fever Never Breaks”: “For more than 500 days, I watched as Mr. Trump’s campaign grew from an awkward rally around a backyard pool in June 2015 to a raucous, 10,000-person convention center event in November 2016. In that same time, I also watched as Mr. Trump’s candidacy survived a procession of death predictions. …

“When I was out on the road following Mr. Trump, I sneaked in a bit of “Game of Thrones” on my laptop between rallies. What I learned, to paraphrase the show, is that what is dead may never die — and, in Mr. Trump’s case, may only rise stronger….In August 2015, a month after a high-ranking [RNC] operative promised me that America would never tolerate a man with no military service disparaging an American military hero, I was standing on a football field in Mobile, Ala., surrounded by 30,000 screaming Trump fans, an unheard-of turnout six months before a primary. Were they mad about the candidate’s words on Mr. McCain? No. The opposite. ‘He’s not afraid of anybody,’ one woman told me.” http://nyti.ms/2vNep7x

— SNEAK PEEK: JILL ABRAMSON reviewed Katy’s “Unbelieveable: My Front-Row Seat to the Craziest Campaign in American History” for the Times. The review and book are out Tuesday. It is already the No. 1 election book on Amazon. … $16.19 on Amazon http://amzn.to/2vNfRqj

WHAT KEN GROSS IS READING — “Nestled in House Spending Bill: Campaign Finance Deregulation,” by WSJ’s Cezary Podkul: “House Republicans are backing several provisions that could reshape campaign finance rules ahead of next year’s midterm elections as spending negotiations continue this fall. … While the House package is unlikely to advance in the Senate, its provisions could become bargaining chips in the negotiations leading up to the next government funding deadline, now Dec. 8. … If they do, churches may be able to contribute to candidates without fear of losing their tax-exempt status, furthering President Donald Trump’s promise to ‘get rid of and totally destroy’ a law that forbids such activity.

“Corporations would be able to ask their employees to donate to unlimited numbers of trade associations’ political action groups instead of limiting employee solicitations to one group per year. Other measures included in the bill would continue to prevent the Internal Revenue Service and the Securities and Exchange Commission from implementing rules that would affect political activities of 501(C)(4) nonprofits and publicly traded corporations, respectively. And the government would again be prohibited from requiring federal contractors to disclose their political contributions and campaign expenditures.” http://on.wsj.com/2xlXayw

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2020 WATCH — “How California could jolt the 2020 presidential race,” by David Siders and Gabe Debenedetti, with a Los Angeles dateline: “California is pushing forward with a plan to change the state’s primary date from June to March, a move that could scramble the 2020 presidential nominating contest and swing the early weight of the campaign to the west. If adopted by the legislature this week — as is widely expected — and signed into law by Gov. Jerry Brown, the early primary would allocate California’s massive haul of delegates just after the nation’s first contests in Iowa, New Hampshire, Nevada and South Carolina.

“The earlier primary could benefit at least two potential presidential contenders from California — U.S. Sen. Kamala Harris and Los Angeles Mayor Eric Garcetti — while jeopardizing the prospects of other candidates who will struggle to raise enough early money to compete in expensive media markets in the nation’s most populous state. ‘In all probability, the winner of the California primary would be the nominee,’ said Don Fowler, a former Democratic National Committee chairman from South Carolina.” http://politi.co/2gUjnJv

— “Retirement watch: The four California members of Congress most likely to bow out by 2018,” by L.A. Times’ Sarah D. Wire — featuring Sen. Dianne Feinstein, Reps. Grace Napolitano, Dana Rohrabacher and Duncan Hunter http://lat.ms/2vNvLkM

MEDIAWATCH — “The Wall Street Journal’s Trump problem: Dozens have left the paper in the past year and interviews with current and ex-staffers show outrage over pressure from management to normalize Trump,” by The Guardian’s Lucia Graves. http://bit.ly/2wQWdgS

BONUS GREAT WEEKEND READS, curated by Daniel Lippman:

–“This Private Investigator Was The Original Most Interesting Man In The World,” by Eamon Javers in BuzzFeed: “The story of Tom Corbally, a private investigator whose career crisscrossed continents and spanned decades, is its own secret history of the 20th century.” http://bzfd.it/2xVN5VZ

–“There’s No Such Thing as a Good Dog,” by Wes Siler in Outside magazine: “People love to tell me how lucky I am to have a good dog like Wiley. But they’re dead wrong — there was no luck involved. Wiley’s good behavior and good temperament are products of four years of hard work, nothing else. The more people who understand this, the more people there will be who have ‘good’ dogs too.” http://bit.ly/2xSDWN9 (h/t TheBrowser.com)

–“Remembering Moynihan in the Age of Trump,” by Charles F. McElwee III in The American Scholar: “If the late senator-scholar were alive, he would see his most acute societal warnings confirmed.” http://theam.cn/2wNa87F

–“The Tamarind is Always Sour,” by Keane Shum in Granta: “By law, the more than one million Rohingya in Myanmar are almost all excluded from Myanmar citizenship, making them the largest stateless group in the world. … There are anywhere between two to three million Rohingya in the world, and the large majority of them do not exist on paper.” http://bit.ly/2vV9m9f

–“Imagination is a powerful tool: Why is philosophy afraid of it?” by Amy Kind in Aeon Magazine: “Hume … talked about how our facility for fantasy helps us to move beyond and change our present reality. One need only think of how Leonardo da Vinci’s fantastical flying machines paved the way for the Wright brothers, or how H G Wells’s novel ‘The War of the Worlds’ (1898) inspired the first liquid-fuelled space rocket, to see the truth of this insight.” http://bit.ly/2f9RlcH

–“The Japanese Origins of Modern Fine Dining,” by Meghan McCarron in Eater Magazine — per Longreads.com’s description: “How kaiseki — Japan’s formal dining tradition — became a major (though often unacknowledged) influence on modern haute cuisine.” http://bit.ly/2wg4Lto

–“What Does an Innocent Man Have to Do to Go Free? Plead Guilty,” by Megan Rose in ProPublica: “A case in Baltimore — in which two men were convicted of the same murder and cleared by DNA 20 years later — shows how far prosecutors will go to preserve a conviction.” http://bit.ly/2gUbkQy (h/t Longform.org)

–“Donald Trump Slept Here – and So Did I: A Visit to a Presidential Home in Queens,” by Newsweek’s Alexander Nazaryan: “Above the bed I am sitting on is a sign encased in a wooden frame. ‘In this bedroom,’ it says in calligraphic font, ‘President Donald J. Trump was likely conceived, by his parents, Fred and Mary Trump. The world has never been the same.’” http://bit.ly/2wPkUu6

–“Inside the Growing Guest Worker Program Trapping Indian Students in Virtual Servitude,” by Nikhil Swaminathan in the Sept./Oct. issue of Mother Jones: The article “takes an in-depth look at America’s Optional Practical Training program and its effect on Indian students and workers. Swaminathan spoke with three dozen guest workers, and analyzed data and lawsuits related to the issue, to illustrate how the OPT program is trapping guest workers in student loan debt and without labor protections. Furthermore, he takes a look at the role of American universities as willing partners in this practice, and the corrupt businesses or ‘body shops’ that prey on these workers.” http://bit.ly/2vM6EPi

–“Hacking Health: Has Silicon Valley Found Its Soul on a Mountaintop in Utah?” by Newsweek’s Abigail Jones: “Started by five young entrepreneurs in 2008, [Summit is] known for drawing participants like Bill Clinton, Richard Branson, actress Sophia Bush and GE vice chair Beth Comstock, and taking attendees (who range from innovators and artists to academics and scientists) on cruises, glamping expeditions—even to the White House.” http://bit.ly/2wgri9z

SPOTTED: Sen. John McCain (R-Ariz.) standing with veterans last night when they did the “Waive Your Caps” tribute at the Nats baseball game … Patrick Ewing at dinner last night at Legal Sea Foods holding court in the back room … former Connecticut Sen. Chris Dodd boarding a delayed flight yesterday to Hartford from DCA (h/t @KMAndersonDC)

SPOTTED celebrating Neil Alpert’s 40th birthday at BLT Prime last night at Trump Hotel: Lisa Spies, Teri Galvez, Michael Steele (former Maryland LT Gov./RNC Chair) and Morgan Ortagus.

OUT AND ABOUT — Luke Mullins, senior writer at Washingtonian and Christina Lennon, senior manager of client experience at Charles Schwab, had a reception last night to celebrate their upcoming marriage. They are getting married in late October in Scotland. Pic http://bit.ly/2xTQwLW SPOTTED: Paul Kane, Charlotte Sellmyer, Brody and Lauren Mullins, Susan Davis and Adam Aigner-Treworgy.

WEEKEND WEDDING — “Tatiana Schlossberg, George Moran” — Times: “The couple met at Yale, from which they both graduated with distinction. Ms. Schlossberg, 27, was until July a reporter at The New York Times, where she covered climate change and the environment. She also received a master’s degree in United States history from the University of Oxford, England. She is a daughter of Caroline B. Kennedy and Edwin A. Schlossberg of New York. The bride’s father, an artist, founded ESI Design, an interactive design firm in New York, of which he is the principal designer. Her mother served as United States ambassador to Japan from 2013 to 2017. … The bride is a granddaughter of President John F. Kennedy and Jacqueline Kennedy Onassis. Mr. Moran, 28, is a fourth-year medical student at Columbia.” With pic http://nyti.ms/2vO9u66

BIRTHDAY OF THE DAY: NYC PR exec Josh Nass, who speaks five languages and says “although I’m told it’s unpopular to confess to this these days, my first language is Russian.” How he’s celebrating: “I plan to have brunch with my close family, followed by dinner with friends at The Prime Grill. My kosher dietary restrictions don’t allow me to explore the many steakhouses that I see everywhere I go in New York City, but fortunately it’s New York, so there are plenty of good kosher options.” Read his Playbook Plus Q&A: http://politi.co/2wRVsTY

BIRTHDAYS: Sara Bonjean (hat tips: hubby Ron and Sean Spicer) … CAP president Neera Tanden, celebrating by spending the day at the Progress Iowa Corn Feed, where she is one of the featured speakers (h/t Lindsay Hamilton) … Jess McIntosh, writer, speaker and Democratic strategist and alum of Hillary for America, Franken and EMILY’s List (h/t Jon Haber) … Bill O’Reilly … Andrew Shapiro, founder and managing director at Beacon Global Strategies and a Hillary and State alum … Hunter Walker, White House correspondent at Yahoo News … Corinne Hoare, professor at AU’s School of Communication (h/t Spicer) … WSJ’s Mara Gay … 1776 founder Donna Harris (h/ts Peter Cherukuri and Kurt Bardella) … James Killen … Dan Centinello … USA Today SCOTUS reporter Richard Wolf … Politico’s Nahal “Halley” Toosi and Paulina Mangubat … Rep. Ted Poe (R-Texas) … former Rep. Cynthia Lummis (R-Wyo.) … Trey Yingst, chief WH correspondent for OANN …

… Michael Moroney, managing supervisor at FleishmanHillard … Deirdre Hackleman … Charlie Szold, public affairs consultant at Midland Strategies … Steve Brusk, CNN White House and Congress supervising producer … Molly Bordonaro … Amanda Cowie, head of business and strategy comms at Bloomberg Media (h/t Ashley Bahnken) … Jocelyn Miller Zeitzoff, AtlanticLIVE director of business development and a Knopf and Weber Shandwick alum, celebrating with a night out in the District (h/t Patrick Garrigan) … Jack Rivers, associate at Goldman Sachs … Lauren Defranco … Rey Ramsey … Mahen Gunaratna, deputy comms director for Mayor Bill de Blasio … Heather Barber … Andy Levin, chief legal officer at Relativity Media … Rachel Teron DeGirolamo … Jane Gross … Karen Steinberg … Kimberly Marie Abbott … Christina Estrada Teczar … CNBC’s Hadley Gamble (h/t Keil) … Barbara Lippert … Oliver Kim … former Sen. John E. Sununu (R-N.H.) … Justin Wiley … Justin Mikita … Tia Torhorst … Reynolds Honold … Justin Cooper (h/ts Teresa Vilmain)

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Posted in news | Tagged , , , | Comments Off on IRMA makes landfall in Florida — THE LIMITS of being a TRUMPOCRAT — FIRST IN PLAYBOOK: TRUMP’s week ahead — IVANKA and JARED dine with NICK AYERS — NICK MERRILL and VAL GALASSO’s big night

THE BIG PICTURE: REPUBLICAN AGENDA in limbo — GOP RETIREMENT watch on — TRUMP calls S. Korean prez a ‘beggar’ in call with Japanese PM – COHN likely to stay – NEW RUSSIAN envoy meets Trump

NEIL KING, former Wall Street Journal reporter (@NKingofDC): “Ran into John Boehner at Trattoria Alberto, his DC hang out. ‘The nation needs you.’ ‘Oh God no,’ he said, radiantly sipping his merlot.” HHS Secretary Tom Price was at a separate table at the restaurant.

BULLETIN — JONATHAN MARTIN and ALEX BURNS on A1 of the Saturday NYT: “[R]epublicans [fear] a wave of retirements going into next year. Representative Dave Trott of Michigan is considering retiring, and another Michigan Republican, Fred Upton, may retire or run for the Senate, according to multiple party officials.” http://nyti.ms/2xW3R7t

Story Continued Below

Good Saturday morning. THE NEW NARRATIVE — “GOP struggles to control its own agenda,” by Burgess Everett, Seung Min Kim and Kyle Cheney: “President Donald Trump’s flirtations with Democrats and fixation on divisive campaign promises have paved the way for hazardous, rolling deadlines over the next six months on spending, the debt ceiling and immigration.

“The debt and spending bill approved by Capitol Hill on Friday averted imminent fiscal disaster, but it’s added more misery for a Republican Party whose agenda has floundered even with unified control of Washington for the first time in a decade. It’s also given Democrats significant leverage to imperil tax reform, the GOP’s best hope at a major legislative victory.

“Rather than dictating the agenda of Capitol Hill, Republican lawmakers oftentimes find themselves at the whims of a capricious White House, Democrats in the minority and a calendar that’s getting increasingly packed ahead of campaign season next spring. Speaker Paul Ryan predicted in January that tax reform, Obamacare repeal and a border wall would all be done by now. Instead, Obamacare repeal may be completely dead at month’s end, there are just broad strokes on tax reform and many Republicans oppose the border wall being pushed by their own president.” http://politi.co/2xcx548

**SUBSCRIBE to Playbook: http://politi.co/2lQswbh

LOST IN THE SHUFFLE of this week: OMB Director Mick Mulvaney was thrashed by his former House Republican colleagues yesterday in a closed door meeting, GOP lawmakers called Treasury Secretary Steven Mnuchin a Democrat and scoffed at his requests and Gary Cohn is still on the outs with President Donald Trump. Those are the three people most intricately involved in tax reform, which the White House wants done by the end of the year.

PRESIDENT TRUMP is at Camp David this weekend. He has a cabinet meeting this afternoon.

— @realDonaldTrump at 8:56 p.m.: “Churches in Texas should be entitled to reimbursement from FEMA Relief Funds for helping victims of Hurricane Harvey (just like others).”

AP at 8:45 a.m. — “MIAMI (AP) – Weather forecasters say eye of powerful Hurricane Irma likely to hit Florida Keys, SW Florida, and Tampa area on Sunday.”

FRONT PAGE SATURDAY — FLORIDA EDITION — SUN SENTINEL: “WE’RE WAITING: South Floridians braced for impact of powerful storm heading our way” http://bit.ly/2wOmE70NAPLES DAILY NEWS: “PREPARE OR EVACUATE” http://bit.ly/2xcXn63THE VILLAGES DAILY: “It’s Decision Time” http://bit.ly/2gSkWuOMIAMI HERALD: “Despite Irma leaning left, S. Fla. still at ‘extreme’ risk” http://bit.ly/2tWCScR

IRMA HEADS TO FLORIDA — “After raking Caribbean, dangerous Irma targets Florida,” by AP’s Anika Kentish and Michael Weissenstein in St. John’s, Antigua: “After battering Cuba early Saturday and leaving more than 20 dead across the Caribbean, a dangerous Irma is taking aim at south Florida with winds nearing 160 mph (257 kph) as another hurricane follows close behind. Irma regained Category 5 status overnight, then dropped back to Category 4 early Saturday as thousands of people in the Caribbean fought desperately to find shelter or escape their storm-blasted islands and more than 6 million people in Florida and Georgia were warned to leave their homes. Wind speeds early Saturday were about 155 mph.” http://bit.ly/2jcjkx0

— MIAMI HERALD: “The Lower Keys will likely take a direct hit from Hurricane Irma, one of the most powerful hurricanes on record, Sunday morning before the ferocious storm roars up Florida’s west coast. Where Irma ultimately makes landfall on the mainland remains uncertain because of the storm’s angle to the coast, National Hurricane Center forecasters said in their early Saturday update. But Irma’s fierce center could near Tampa Bay, which has not been struck by a major hurricane since October 1921, when the population was about 10,000, said hurricane center spokesman Dennis Feltgen. About 4 million people now live in the low-lying area.” http://hrld.us/2faXt4G

— “Jose, nearing Category 5 status, threatens second blow to islands already ravaged by Irma,” by WaPo’s Anthony Faiola in Cabaret, Haiti, and Lindsey Bever and Andrew deGrandpre in Washington: “Hurricane Jose, a powerhouse tropical cyclone barreling northwest toward the Caribbean islands already hammered by Irma, is now ‘almost a Category 5’ storm, officials said. … A hurricane warning is in effect for Barbuda and St. Martin, both of which were obliterated by Irma, as well as for Anguilla and St. Barthelemy, also known as St. Barts. The island of Antigua is under a hurricane watch. Once it passes the northern Leeward Islands, Jose is projected to hook north and steadily lose muscle. It will, however, likely throw off tropical-storm strength weather felt Saturday night in the British and U.S. Virgin Islands, which also sustained heavy damage during Irma.” http://wapo.st/2wRuTN8

THE PROBLEM THAT WON’T GO AWAY “Trump Team Prepping Aggressive Options for North Korea,” by NBC News’ Carol Lee and Courtney Kube: “The Trump administration is readying a package of diplomatic and military moves against North Korea, including cyberattacks and increased surveillance and intelligence operations, after the nation’s sixth and largest nuclear test, according to senior White House and Pentagon officials. The U.S. may also propose a U.N. Security Council resolution mandating the inspection of ships arriving or leaving the reclusive state …

“President Trump is also seriously considering adopting diplomatically risky sanctions on Chinese banks doing business with Pyongyang and upgrading missile defense systems in the region … In addition, the administration is not ruling out moving tactical nuclear weapons to South Korea should Seoul request them … though many consider such a move a nonstarter. It would break with nearly three decades of U.S. policy of denuclearizing the Korean Peninsula.” http://nbcnews.to/2eU5ZrJ

“Fuji TV: Trump calls President Moon a ‘beggar’ during phone call with Japanese PM”: “U.S. President Donald Trump allegedly disparaged South Korean President Moon Jae-in as acting ‘like a beggar’ with his calls for dialogue with North Korea. The remarks were supposedly made in a telephone conversation with Japanese Prime Minister Shinzo Abe, the Japanese network Fuji TV reported on Sept. 7. According to the network, Trump made the disparaging remarks about Moon to Abe in a telephone conversation on Aug. 29, after North Korea test-launched a missile that passed through Japanese airspace. Trump was also quoted as asking Abe ‘not to tell anyone’ about the need for military pressure on North Korea.” http://bit.ly/2wgrNAk

— “Trump review leans toward proposing mini-nuke,” by Bryan Bender: “The Trump administration is considering proposing smaller, more tactical nuclear weapons that would cause less damage than traditional thermonuclear bombs — a move that would give military commanders more options but could also make the use of atomic arms more likely. A high-level panel created by President Donald Trump to evaluate the nuclear arsenal is reviewing various options for adding a more modern ‘low-yield’ bomb, according to sources involved in the review to further deter Russia, North Korea or other potential nuclear adversaries.” http://politi.co/2wPcVgL

****** A message from Hewlett Packard Enterprise: How are Hewlett Packard Enterprise‘s supercomputers helping create the future in science, medicine and national security? Learn more: http://ift.tt/2w02v9q ******

INSIDE THE WEST WING — “Kelly’s deputy annoys Trump aides with rigid style,” by Annie Karni: “Chief of staff John Kelly’s no-nonsense deputy, Kirstjen Nielsen, has been working in the White House for only five weeks. But in her short tenure, the new sheriff’s No. 2 has already helped set a new tone in the West Wing that was described by more than 10 senior administration officials and outside advisers to the president as one that can be dismissive and lacking in collegiality. These people worry that Nielsen — who now occupies former chief strategist Steve Bannon’s old office — is at risk of squandering the morale boost that accompanied the arrival of the four-star general and the hope for a fresh start.

“Nielsen, who served as Kelly’s chief of staff at the Department of Homeland Security before moving with him to the West Wing, routinely cancels meetings with senior officials if someone shows up late, multiple aides said. Phone calls often go unreturned. … Nielsen has been greeted by an especially vociferous backlash from a group of people who say they are not simply bridling at a new structure. Some Trump loyalists even refer to Nielsen behind her back as ‘Nurse Ratched,’ a reference to the malevolent head nurse in ‘One Flew Over the Cuckoo’s Nest,’ who coldly presides over a mental hospital.” http://politi.co/2jckIjc

— MAGGIE HABERMAN and GLENN THRUSH: “It is Ms. Nielsen who sends out the emails announcing internal policy and planning meetings that now contain a clipped addendum — ‘principals only’ — with a stern warning that any subordinates who wander in will be immediately ejected. She is also responsible for keeping Mr. Kelly’s no-fly list of aides he deems to be unfit to attend serious meetings, the most prominent of whom is Omarosa Manigault, the former “Apprentice” star with an ill-defined job and a penchant for dropping into meetings where she was not invited.

“Throughout the White House, the circle of decision-making is shrinking, leaving staff members accustomed to wandering in and out of meetings — and the Oval Office — in a sour mood. And the feelings are not confined by the gates of the executive compound. Outside Trump advisers, accustomed to getting their calls briskly returned, are complaining that their phones have gone silent since Mr. Kelly took over six weeks ago.” http://nyti.ms/2eN1dZs

— “Cohn doubles down on tax reform as rumors swirl about his West Wing status,” by Nancy Cook, Ben White, Josh Dawsey and Daniel Lippman: “Rumors of Gary Cohn’s demise in Donald Trump’s White House have swirled for weeks. But Cohn is intent on remaining with the administration to finish tax reform — though it’s unclear how long he would stay beyond its passage … He’s aware that he may have killed his chances for Fed chair with critical comments after Charlottesville. … A Cohn friend who spoke to him at a party in D.C. on Thursday night said he was ‘in a great mood’ and ‘highflying’ after the president cut a deal on Wednesday with Senate Minority Leader Chuck Schumer and House Minority Leader Nancy Pelosi to raise the debt ceiling.

“Cohn has long advocated for the president to work more closely with Schumer, one New York source who knows both men said, since they’re both New Yorkers who aren’t fierce ideologues and like to make deals. … Cohn’s reaction [to Charlottesville] irritated the president and created distance between them. They haven’t spoken privately since then. Cohn also made some disparaging remarks about the way the White House functions under the president to friends in the Hamptons in August that found their way back to Trump and further exacerbated their working relationship.” http://politi.co/2wgssSi

THE LATEST ON THE RUSSIA PROBE — “Mueller gives White House names of 6 aides he expects to question in Russia probe,” by WaPo’s Carol D. Leonnig, Ros Helderman and Ashley Parker: “Special counsel Robert S. Mueller III has alerted the White House that his team will probably seek to interview six top current and former advisers to President Trump who were witnesses to several episodes relevant to the investigation of Russia’s meddling in the 2016 election, according to people familiar with the request.

“Mueller’s interest in the aides, including trusted adviser Hope Hicks, former press secretary Sean Spicer and former chief of staff Reince Priebus, reflects how the probe that has dogged Trump’s presidency is starting to penetrate a closer circle of aides around the president. …

“Mueller has notified the White House he will probably seek to question White House counsel Don McGahn and one of his deputies, James Burnham. Mueller’s office has also told the White House that investigators may want to interview Josh Raffel, a White House spokesman who works closely with Trump son-in-law Jared Kushner. White House officials are expecting that Mueller will seek additional interviews, possibly with family members, including Kushner, who is a West Wing senior adviser, according to the people familiar with Mueller’s inquiry.” http://wapo.st/2jcLuYw

— “White House communications director Hope Hicks retains lawyer in Russia probe,” by Annie Karni and Eliana Johnson: “White House communications director Hope Hicks has retained a personal attorney, as the special counsel’s investigation into the Trump campaign’s ties to Russia is expected to heat up this fall. Hicks, 28, has hired Robert Trout, a highly regarded attorney and founder of the firm Trout Cacheris & Janis, according to multiple sources familiar with the hire. Trout is a veteran of the Justice Department. He is also a former assistant U.S. attorney in Baltimore.” http://politi.co/2xjfWXa

PENCE BACK TO THE HOOSIER STATE — “Pence to travel to Indiana to push tax reform, pressure Sen. Joe Donnelly,” by Matt Nussbaum: “Vice President Mike Pence will travel to his home state of Indiana later this month to make the case for tax reform and put pressure on Democratic Sen. Joe Donnelly, who is up for reelection in 2018 in the deeply conservative state. Pence is slated to make the trip on Sept. 22, according to a senior administration official.” http://politi.co/2xSFd6P

MEDIAWATCH — “Eric Bolling Out at Fox News,” by Yashar Ali in HuffPost: “Fox News has parted ways with host Eric Bolling, the network confirmed Friday, just over a month after an exclusive HuffPost report revealed Bolling sent inappropriate text messages to current and former female colleagues. News of the departure comes after two HuffPost reports revealed a pattern of inappropriate behavior by Bolling, who co-hosts ‘Fox News Specialists.’ Fox News will cancel the program, it said in a statement. ‘Eric Bolling and Fox have agreed to part ways amicably,’ the network said. ‘We thank Eric for his ten years of service to our loyal viewers and wish him the best of luck.’” http://bit.ly/2gRZVk3

— “Chris Christie in talks to be cable news contributor after leaving office,” by CNN’s Hadas Gold and Oliver Darcy: “New Jersey Gov. Chris Christie’s possible career as a sports broadcaster may not have panned out, but he might still have a shot at a television gig. Christie has had conversations with both MSNBC and CNN about possible contributor deals after his term ends, according to three sources with knowledge of the talks. … Christie is not in talks with Fox News.” http://cnnmon.ie/2vMzwXC

WALL STREET-WASHINGTON AXIS — “Jamie Dimon ventures beyond Wall Street to have a say in Washington,” by Reuters’ Pete Schroeder and David Henry: “JPMorgan Chase & Co Chief Executive Jamie Dimon is starting to look like Corporate America’s shadow president. The 61-year-old banker has made more than a dozen trips to Washington so far this year to press a broad agenda with a range of influential policymakers, people who attended the meetings or are familiar with his schedule said. Dimon has already visited the nation’s capital four times as much as he does in a typical year. His ramped-up presence comes after taking the helm of the Business Roundtable, a lobbying group that represents CEOs of large U.S. companies, in December. …

“The frequency of his trips, and the wide range of policies he has been discussing, have started chatter among power brokers in Washington and on Wall Street about how much energy Dimon is devoting to issues beyond JPMorgan. At times, they said, Dimon carries himself more like someone running the country than someone running a bank.” http://reut.rs/2wPD3YU

STEVE BANNON TO CHINA — NYT’S MARK LANDER: “Next week, he plans to travel to Hong Kong to deliver a keynote address at an investor conference, where he will articulate his call for a much tougher American policy toward China. CLSA, the Hong Kong brokerage firm that invited Mr. Bannon, is owned by a politically connected Chinese investment bank, Citic Securities. People close to Mr. Bannon said he met recently with Henry A. Kissinger, the elder statesman who opened a diplomatic channel to China in 1972, to exchange views about the relationship with Beijing. Mr. Bannon said he admires Mr. Kissinger and has read all his books, but none of that swayed him from his preference for confrontation over diplomacy.” http://nyti.ms/2wPpIQt

MOSCOW WATCH — “New Russian envoy describes ‘warm’ meeting with Trump: agencies” — Reuters: “Russia’s newly installed ambassador to Washington said on Friday that he had a warm and constructive meeting with U.S. President Donald Trump, Russian news agencies reported. ‘I was received by President Trump, I presented my credentials. For my part I said that we are looking forward to an improvement in the relations between our two countries,’ Tass news agency quoted the ambassador, Anatoly Antonov, as saying. ‘President Trump received me in a warm and friendly way … The atmosphere was very genial, constructive and welcoming. At least, that was my personal feeling,’ Russia’s RIA news agency quoted Antonov as saying.” http://reut.rs/2eUIAqh

— “Document details scrapped deal for Trump Tower Moscow,” by CNN’s Gloria Borger and Marshall Cohen: “Around the time presidential candidate Donald Trump was touting his real estate dealings at a Republican primary debate, a proposal was in the works to build a Trump Tower in Russia that would have given his company a $4 million upfront fee, no upfront costs, a percentage of the sales, and control over marketing and design. … [T]he deal [also] included the opportunity to name the hotel spa after his daughter Ivanka. An internal Trump Organization document from October 2015, obtained by CNN on Thursday, reveals the details of a 17-page letter of intent that set the stage for Trump’s attorney to negotiate a promising branding venture for Trump condominiums, a hotel and commercial property in the heart of Moscow.

“Trump signed the document later that month, according to Michael Cohen, his corporate attorney at the time. The document CNN obtained does not have Trump’s signature because it is a copy of the deal that Cohen brought to Trump to sign. Cohen pulled out of the arrangement three months later as the project failed to get off the ground.” http://cnn.it/2jaQuwISee the document http://cnn.it/2wfDLtZ

****** A message from Hewlett Packard Enterprise: A nation‘s strength is increasingly measured by its technical prowess. As the designer and builder of more supercomputers than any other company in the world, Hewlett Packard Enterprise is proud to lead the way in one of the future‘s most important technologies. Visit http://ift.tt/2w02v9q to learn more about how Hewlett Packard Enterprise‘s supercomputers are helping create the future in science, medicine and national security. ******

CLICKER – “The nation’s cartoonists on the week in politics,” edited by Matt Wuerker – 15 keepers http://politi.co/2xSY8ON

GREAT WEEKEND READS, curated by Daniel Lippman:

–“The Trials of a Muslim Cop,” by Rachel Aviv in The New Yorker: “Bobby Hadid joined the N.Y.P.D. after 9/11, to protect his new country. But when he questioned the force’s tactics, his life began to erode.” http://bit.ly/2wQisTD

–“Blood Brother,” by Sarah Smarsh in VQR: “The buyers are corporations with names like BioLife, Biotest, Octapharma. Plasma brings thirty, fifty bucks a pop depending on how often you go and how much you weigh. … The more plasma given, the more points and the higher status they attain—bronze, silver, gold. If you’re away too long, they want you back.” http://bit.ly/2faBJ8Y

–“Fifty-one inches,” by The Houston Chronicle’s Mike Hixenbaugh, David Hunn and Mark Collette: “Terror, heartbreak and heroism as five souls brave the worst storm in U.S. history.” http://bit.ly/2eUSsjs

–“A Traumatic History,” by Edgar Jones in Spiked Online: “During the First and Second World War, you were expected to be resilient, you were expected to be well. And if you were traumatised, you were considered a bit unusual and potentially vulnerable. Today, we’ve almost gone full circle, and forgotten about the resilient side. Because, in actual fact, most people will not suffer from PTSD if exposed to a terrifying event.” http://bit.ly/2fadbwG (h/t ALDaily.com)

–“Etiquette and the Cancer Patient,” by Ted Rheingold on Medium: “The further out you are from the inner circle the more thoughtful you have to be to find out ways to help. The primary caregivers are too overwhelmed to find tasks for each person that offers help. Understand that the family may be overwhelmed with offers of help and doesn’t have the time to give thoughtful declines. Take a non-answer as a No and don’t belabor the situation by making the offer repeatedly.” http://bit.ly/2xSTGzw (h/t TheBrowser.com)

–“The bit bomb,” by Rob Goodman and Jimmy Soni in Aeon Magazine: “It took a polymath to pin down the true nature of ‘information’. His answer was both a revelation and a return.” http://bit.ly/2jdpk8G

–“Comfort Woman,” by Erika Krouse in Granta: “I showed up and lied to people, which is illegal for attorneys but not for private investigators – not for me. I pretended to be a triathlete; I pretended to be a wealthy donor; I pretended to have breast cancer. It felt strange to lie to people’s faces – wrong, until I discovered that they actually believed me.” http://bit.ly/2gScSqj

–“Anatomy of terror: What makes normal people become extremists?” by Peter Byrne in The New Scientist: “It takes more than religious fanaticism or hatred to make someone take innocent lives, but recognise the true roots of ISIS-inspired terror and they can be addressed.” http://bit.ly/2eUtm4z

–“The Resegregation of Jefferson County,” by Nikole Hannah-Jones in the NYT Magazine: “What one Alabama town’s attempt to secede from its school district tells us about the fragile progress of racial integration in America.” http://nyti.ms/2eMWarJ

–“How the Meat Industry Thinks About Non-Meat-Eaters,” by Joe Pinsker in The Atlantic: “The people who oversee the plants are the ones [trade publication] Meatingplace is intended for. The ads in it are, to say the least, different than those in general-audience magazines. There is one for the PTL-2600 Corndog Machine, an apparatus that can put out 16,000 corndogs per hour (‘Corndogs don’t grow on trees … they’re produced on the PTL-2600’).” http://theatln.tc/2xVnrRc (h/t Longreads.com)

–“If Unilever Can’t Make Feel-Good Capitalism Work, Who Can?” by Thomas Buckley and Matthew Campbell in Bloomberg Businessweek: “The $170 billion corporate empire has been trying to prove corporations can do well by doing good. Can the idealism survive in an age of cost-cutting?” https://bloom.bg/2gRjrK3

–“Shelter and the Storm,” by Katherine Boo in the Nov. 28, 2005 issue of The New Yorker: “Katrina’s victims come to town.” http://bit.ly/2wq3p2D

–“Disaster Aversion,” by Rivka Galchen in the Oct. 2009 issue of Harper’s: “The quest to control hurricanes.” http://bit.ly/2xW5Ok7

–“Theater of War,” by Jessica Hatcher-Moore in the Atavist Magazine: “He traveled to some of the world’s most dangerous places to disarm militias, negotiate with gangs, and defy terrorists. But Bill Brookman was just a clown.” http://bit.ly/2gU5ZZj (h/t Longform.org)

SPOTTED: Paul Manafort awaiting a flight from DCA to LGA on Friday morning — pic of him scratching his head and looking straight ahead into our tipster’s camera http://politi.co/2eUS5p6 … Rep. Lee Zeldin (R-N.Y.) yesterday on Southwest flight 1360 from BWI to Islip on Long Island

TRANSITIONS – OBAMA ALUMNI — Michael Greenwald has joined Tiedemann Wealth Management as SVP, where he will work in both the D.C. and Palm Beach offices of the firm. He served as the first U.S. Treasury attaché to Qatar and Kuwait and left Treasury this July. … David Cohen, former CIA deputy director, and Mike Connor, former deputy secretary at Interior, have joined WilmerHale as partners. … Jones Day has hired DOJ alums Benjamin Mizer and Shirlethia Franklin. Mizer will be part of the firm’s issues and appeals practice as a partner, while Franklin will be of counsel in the business and tort litigation practice.

Wajahat Ali, a contributing NYT op-ed writer, has started a new initiative called Voices of Change, Voices of America: American Muslim Media Training, which “aims to empower 120 American Muslims to reclaim their narrative in public discourse and in the media.” … Scott Roehm, the VP of programs and policy at the Constitution Project, is joining the Center for Victims of Torture as its new Washington director.

BIRTHDAYS: Jonathan Cohn, HuffPost’s senior national correspondent … Eric Draper … Sen. Chris Coons (D-Del.) (hat tip: Eric Wall) … Matt Boyle, Breitbart’s Washington political editor, who celebrated in Las Vegas on Friday (h/t Alexandra Preate) … Kelly Schwartz (hubby tip: Roy) … Matt Bai, national political columnist at Yahoo News … journalist David Freedlander … Aimee Steel … CAP senior fellow Glen Fukushima … Michael B. Greenwald, former U.S. Treasury attaché to Qatar and Kuwait and now SVP at Tiedemann Wealth Management, is 34 (h/t Morgan Ortagus) … Quincey Grieve … Laura Cash (h/t Claude Marx) … former Rep. Glenn Nye (D-Va.) … Bill Sparks … Christina Wagner … Augusta Mellon, on the comms team for Bloomberg Media, is 3-0 (h/ts Ashley Bahnken) … Ebony Meeks … Emily Daly … Ron Dotzauer … Rachel Rizzo, research associate at the Center for a New American Security (h/t John Hudson) … Kara Voght of Politico and The Atlantic … AP’s Matt Lee … Dwayne Carson … Rob Biederman, cofounder and CEO of Catalant Technologies …

… Dr. Judith Rodin, former president of The Rockefeller Foundation and UPenn president … Jason Denoncourt … Henrique Ferreira … Katelyn Israelski … ABC News contributor Tara Setmayer Love (h/t Kurt Bardella) … Nawaid Ladak … Twitter’s Greg Maxson … Dan Brandt … Javelin’s Vanessa Oblinger, who celebrated with cake and champagne with her colleagues at the office yesterday (h/t Keith Urbahn) … Ryan Wegman … Jordan Bloom … Allan Dodds Frank … Diego Sanchez Gallardo … Chris Cooks … former Rep. Buck McKeon (R-Calif.) … DOJ’s Michael Harper … Wendy Oscarson Kirchner … Cherie Harder, president of The Trinity Forum … Jeff Weintraub … Steve Raikin … Karen Fawcett … Andrew Morin … Sophie Kurz-Cosgrove (h/ts Teresa Vilmain)

THE SHOWS by @MattMackowiak, filing from Austin:

— CNN’s “State of the Union”: Sen. John McCain (R-Ariz.)

— CBS’s “Face the Nation”: Sen. Bill Nelson (D-Fla.) … Rep. Michael McCaul (R-Texas). Panel: Jeffrey Goldberg, David Nakamura, Susan Page and Kori Schake

— NBC’s “Meet the Press”: Pre-empted for live coverage of Hurricane Irma

— ABC’s “This Week”: Guests to be announced

— “Fox News Sunday”: FEMA Administrator Brock Long … Rep. Jim Jordan (R-Ohio). Panel: Brit Hume, Mo Elleithee, Gillian Turner and Juan Williams

— Fox News’ “Sunday Morning Futures”: Key West, Florida Mayor Craig Cates … Rep. Ron DeSantis (R-Fla.) … Newt Gingrich … Miami Beach, FL Mayor Philip Levine … Carl Higbie … Don Peebles … Palm Beach, Florida deputy town manager Jay Boodheshwar. Panel: Ed Rollins and Mary Kissel

— Fox News’ “MediaBuzz”: Erin McPike … Susan Ferrechio

— CNN’s “Inside Politics”: Guests to be announced

— CNN’s “Fareed Zakaria GPS”: Guests to be announced

— CNN’s “Reliable Sources”: Guests to be announced

— Univision’s “Al Punto”: Alejandro Roldan … Rep. Luis Gutierrez (D-Ill.) … White House Director of Policy and Interagency Coordination Carlos Diaz Rosillo … “United We Dream” executive director and co-founder Cristina Jimenez and immigration attorney Ezequiel Hernandez … former HUD Secretary Henry Cisneros … Bianca Jagger … Cecile Richards

— C-SPAN: “The Communicators”: AEI Center for Internet, Communications & Technology Policy visiting scholar Mark Jamison, questioned by Reuters’ David Shepardson … “Newsmakers”: Rep. Mark Walker (R-N.C.), questioned by Bloomberg News’ Anna Edgerton and Politico’s Sarah Ferris … “Q&A”: Open the Books founder and CEO Adam Andrzejewski

— Hearst / Sony’s “Matter of Fact” with Soledad O’Brien: Rep. Ruben Kihuen (D-Nev.) … Rep. Jim Banks (R-Ind.) and Rep. Raja Krishnamoorthi (D-Ill.) … Steve Ellis … report on Pennsylvania nuns who built an outdoor chapel on land they own to stop a natural gas pipeline … report on the NOAA pilots who gather flight data about hurricanes.

— Washington Times’ “Mack on Politics” weekly politics podcast with Matt Mackowiak (download on iTunes, Google Play, or Stitcher or listen at http://bit.ly/2omgw1D): Texas Tribune CEO Evan Smith.

****** A message from Hewlett Packard Enterprise: To super compete, America must super compute. Supercomputing is key to future breakthroughs in medicine, science and manufacturing. As the designer and builder of more supercomputers than any other company in the world, Hewlett Packard Enterprise is helping America increase its competitive edge in not only today‘s economy, but tomorrow’s. Visit http://ift.tt/2w02v9q to learn more about how HPE supercomputers help America compete. ******

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Posted in news | Tagged , , , | Comments Off on THE BIG PICTURE: REPUBLICAN AGENDA in limbo — GOP RETIREMENT watch on — TRUMP calls S. Korean prez a ‘beggar’ in call with Japanese PM – COHN likely to stay – NEW RUSSIAN envoy meets Trump

Dent to retire

With Zach Montellaro, Maggie Severns and Daniel Strauss

The following newsletter is an abridged version of Campaign Pro’s Morning Score. For an earlier morning read on exponentially more races — and for a more comprehensive aggregation of the day’s most important campaign news — sign up for Campaign Pro today. (http://ift.tt/1rYrnXl)

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DENTED — “GOP moderate Rep. Dent won’t seek re-election in 2018,” by Kyle Cheney and Alex Isenstadt: “Pennsylvania Rep. Charlie Dent, a Republican who occupies a swing district, will not seek reelection in 2018, he confirmed in a statement on Thursday night. Dent issued a statement emphasizing his lengthy career in public office and noting that he ‘never planned on serving’ more than five or six terms — but he’s now in his seventh. … Dent’s retirement comes the day after another swing district Republican, Washington Rep. Dave Reichert, announced he was calling it quits. Florida Rep. Ileana Ros-Lehtinen, another moderate, is also retiring. Democrats are certain to target all three seats in next year’s midterms. Dent’s announced departure comes one day after state Rep. Justin Simmons said he would challenge him in a primary. Dent spent much of 2017 opposing President Donald Trump’s agenda, to the chagrin of hardline conservatives, who vowed to oppose him.” Full story.

— From Dent’s statement: “As a member of the governing wing of the Republican Party, I’ve worked to instill stability, certainty and predictability in Washington. I’ve fought to fulfill the basic functions of Government, like keeping the lights on and preventing default. Regrettably, that has not been easy given the disruptive outside influences that profit from increased polarization and ideological rigidity that leads to dysfunction, disorder and chaos.”

— Reminder: Three (contested) seats may make a trend, but it doesn’t make a majority.

BADGER STATE BATTLE — “Leah Vukmir enters Republican U.S. Senate race in bid to unseat Democrat Tammy Baldwin,” by the Milwaukee Journal Sentinel’s Bill Glauber: “Vowing to bring the ‘Wisconsin Way’ to the U.S. Senate, state Sen. Leah Vukmir of Brookfield entered the race for the Republican nomination to take on Democratic incumbent Tammy Baldwin next year. In a campaign video and announcement that was released Thursday morning, Vukmir cast herself as a ‘consistent conservative’ who during tough political battles stood side by side with Republican Gov. Scott Walker. … By emphasizing her deep roots among Wisconsin Republicans, Vukmir, 59, is seeking to offer a vivid contrast with the only other candidate in race, Delafield businessman and U.S. Marine veteran Kevin Nicholson. … A Vukmir-Nicholson political battle has already brought in two of the biggest contributors to the GOP. Beloit billionaire Diane Hendricks, owner of ABC Supply, will serve as Vukmir’s finance co-chair. Richard Uihlein, who lives in Lake Forest, Ill., and is co-owner of Pleasant Prairie-based Uline Corp., has already poured in $3.5 million into a super PAC that backs Nicholson.” Full story.

— Big money comes to Senate primaries: The fight between Nicholson (and Uihlein) and Vukmir (and Hendricks) and potentially self-funding businessman Eric Hovde will be just one of several GOP Senate primaries that could see huge spending in 2018. The Club for Growth already has $10 million set aside for Missouri Attorney General Josh Hawley, some of which is likely to be spent fending off primary challengers. Both Rep. Evan Jenkins and Attorney General Patrick Morissey have super PACs in West Virginia. The Club for Growth is with Nicholson and state Auditor Matt Rosendale in Montana.

2016 REDUX — “Bernie backers’ attacks on Democrats infuriate the party,” by Gabriel Debenedetti: “Prominent Democrats are increasingly riled by attacks from Bernie Sanders‘ supporters, whose demands for ideological purity are hurting the party ahead of the 2018 midterms and 2020 presidential election, they say. But it’s not just the outside agitators that Democratic lawmakers, operatives, and activists are annoyed with: They’re tired of what they see as the senator’s hesitance to confront his own backers, either in public or through back channels. Tensions boiled over recently when a handful of Sanders loyalists bashed freshman Sen. Kamala Harris — a rising star in the party and potential 2020 hopeful — as an establishment tool. Democrats were also rankled that other prominent Sanders allies said support for single-payer health care should be a litmus test for candidates.

In response, Democratic senators and outside groups have begun telling Sanders and friendly intermediaries that if he wants to be a leading figure for Democrats ahead of 2020’s presidential election, he needs to get his supporters in line — or at least publicly disavow their more incendiary statements. … The complaints have largely gone unheeded by Sanders’ camp. Many of the senator’s closest allies insist such frustration simply reflects the same misunderstanding of Sanders’ “political revolution” Democrats have had since he first started running for president. ‘Bernie Sanders really does lead a movement, he doesn’t run an organization. And movements are different from organizations,’ said Mark Longabaugh, a veteran Democratic strategist who was a senior advisor to Sanders’ campaign. ‘A movement operates organically and moves on its own. It can have leaders, but no one directs a movement.’” Full story.

NEW POLLING — ECU finds House Democrats with higher approval than Republican counterparts: House Democrats in key battleground districts tend to have a higher approval rating than Republicans, left-leaning End Citizens United found in a new poll of 50 of the most competitive House districts. ECU found Democrats in competitive districts had an overall job approval of 53 percent ,while Republicans’ approval was 37 percent. And 30 percent of voters disapproved of Democratic incumbents, while 40 percent disapproved of Republicans.

ECU also polled Trump’s popularity and found that 37 percent of likely voters approve of the president’s job performance, while 61 percent disapprove. Among Independents, 34 percent approved of Trump’s job performance and 61 percent disapproved. The poll was conducted by Normington, Petts & Associates of 1,000 likely voters in 50 top battleground districts (31 currently held by Republicans and 19 held by Democrats) between Aug. 24 and Sept. 5. The margin of error is 3.1 percentage points.

Days until the 2017 election: 60.

Days until the 2018 election: 424.

Thanks for joining us! You can email tips to the Campaign Pro team at sbland@politico.com, eschneider@politico.com, krobillard@politico.com, dstrauss@politico.com and mseverns@politico.com.

You can also follow us on Twitter: @politicoscott, @ec_schneider, @politicokevin, @danielstrauss4 and @maggieseverns.

MENENDEZ WATCH — “Federal Judge excoriates Sen. Menendez prosecution team,” by the Washington Post’s Devlin Barrett: “The judge overseeing the bribery trial of Sen. Robert Menendez ripped into prosecutors Thursday for trying to focus on what he called ‘tabloid’ details — an unusual description for dry testimony about a series of emails about a hotel reservation. U.S. District Judge William Walls stopped testimony for 20 minutes in which he tongue-lashed prosecutors for their painstaking recounting of emails used to book a luxury hotel in Paris for the New Jersey Democrat in 2010. The three-day hotel stay is a central part of the Justice Department’s case. … He halted questioning of FBI supervisory analyst Jane Ruch about emails discussing Menendez’s lunch plans during the trip. After having the jury leave the courtroom, the judge lit into Justice Department lawyers. ‘I don’t think it’s a sin for him to want a limestone bath, per se,’ Walls said. ‘It’s tabloid in nature. . . . Whether these defendants engaged in bribery does not depend on whether the senator chose a more expensive room. We’re not talking about Days Inn.’’ Full story.

— Here’s what Democratic senators up in 2018 have to say. Missouri Sen. Claire McCaskill, to HuffPost: “I’m a former prosecutor, so I was trained appropriately to never discuss a trial until it is completed. That process needs to be completed before we all start weighing in politically.” … West Virginia Sen. Joe Manchin, to CNN: “We are a country of laws. And I think people should just let this process go through before they come to judgment in any way shape or form.” … Montana Sen. Jon Tester told CNN he’s been focused on wildfires in his home state: “I haven’t really been paying attention to the trial.”

EARLY POLLING NUMBERS — “Poll shows Schuette, Whitmer deadlocked in potential matchup for Michigan governor,” by the Detroit Free Press’ Paul Egan: “If Michigan’s election for governor was held today, the party’s presumed front-runners — Democrat Gretchen Whitmer and Republican Bill Schuette — would be deadlocked in a head-to-head matchup, according to a new poll. But Schuette would defeat another potential Democratic candidate — Southfield trial attorney Geoffrey Fieger — by 10 percentage points, says the poll from EPIC-MRA of Lansing.” Full story.

— FIRST IN SCORE — New Tennesseans for Conservative Action poll: New polling by Tennesseans for Conservative Action obtained first by Score finds President Donald Trump with an 82 percent job performance approval among Republicans in the state. The poll also found voters divided among which Republican gubernatorial candidate to support. About 14 percent said they support Rep. Diane Black, while 11 percent said they back former Tennessee Economic and Community Development Commissioner Randy Boyd. Another 7.4 percent picked Tennessee House Speaker Beth Harwell. But the majority of those surveyed (57 percent) said they were undecided. Read the full results here.

— Ryan challenger releases polling showing him down nine: Randy Bryce, the ironworker making a much-hyped challenge to House Speaker Paul Ryan, released a poll showing him trailing Ryan by nine points, 46 percent to 37 percent. The poll, from Global Strategy Group, has Trump’s approval rating at just 42 percent in the district, and Ryan’s approval rating at 50 percent. After reading short, positive biographies of both men, Bryce takes a 44 percent to 41 percent lead. Full results here.

SHADOW PRIMARY — Zinke’s wife backs Downing: “Troy Downing, GOP candidate for the U.S. Senate [in Montana], said Wednesday that Lola Zinke, wife of Secretary of the Interior Ryan Zinke, will serve as his campaign chairwoman,” the Great Falls Tribune reported. Full story.

2018 WATCH — “Donna Lynne makes it official, enters Colorado governor’s race,” by the Denver Post’s John Frank: “Gov. John Hickenlooper picked Lynne, a former health insurance company executive, for the state’s No. 2 ranking job in March 2016. Lynne initially said she wouldn’t run to succeed him in two years, but now she enters the race with Hickenlooper’s support and the power of the office to help boost her bid. … A first-time candidate with no political base of support, Lynne faces a difficult challenge in her bid to top four prominent challengers — businessman Noel Ginsburg, former state Sen. Mike Johnston, former state Treasurer Cary Kennedy and U.S. Rep. Jared Polis — who have been securing support and raising money for months now.” Full story.

QUOTE OF THE DAY: “The press has been incredible.” — Donald Trump to Democratic Leader Nancy Pelosi in a morning phone call, discussing coverage of their deal to extend the debt limit for three months.

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Posted in news | Tagged , , , | Comments Off on Dent to retire

Feinstein could face challenge from left

With Zach Montellaro and Kevin Robillard

The following newsletter is an abridged version of Campaign Pro’s Morning Score. For an earlier morning read on exponentially more races — and for a more comprehensive aggregation of the day’s most important campaign news — sign up for Campaign Pro today. (http://ift.tt/1rYrnXl)

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TO THE LEFT — “Odds grow that Feinstein faces 2018 primary challenge from the left,” by POLITICO’s Carla Marinucci in San Francisco: “Dianne Feinstein has dominated California politics for more than a quarter of a century. But facing blistering criticism that she’s out of touch with the progressive left, Feinstein — the oldest member of the Senate — is facing fresh criticism from liberals for her centrist politics.”

“Buzz in state political circles increasingly centers on one prospective Democratic challenger, Kevin de Leon of Los Angeles, the first Latino to hold the powerful position of state Senate pro tem in more than 120 years. … De Leon won national notice last week when he took public umbrage after Feinstein’s seemingly conciliatory remarks about Trump. His public rebuff — the toughest from any prominent state Democrat — was pointed: ‘This president has not shown any capacity to learn and proven he is not fit for office. It is the responsibility of Congress to hold him accountable — especially Democrats — not be complicit in his reckless behavior.’” Full story here.

THE BIG QUESTION POLITICO’s Josh Dawsey and Burgess Everett ask, “Does President Donald Trump want to wallop or woo Democrats?”: “Trump’s aides have teamed up with the National Republican Senatorial Committee to target vulnerable Democrats and plan presidential travel to help the GOP maintain its congressional majorities during the elections that are 14 months away. … But, as shown Wednesday, Trump is a wild card — and seems increasingly inclined to work with Democrats. Trump took a soft touch during a tax reform event with Sen. Heidi Heitkamp, who is among the most at-risk Democrats in a state that Trump carried by 36 points in November.” Full story here.

HAPPENING TODAY — Trump Jr. to meet with Senate: Donald Trump Jr. is slated to meet with the Senate Judiciary Committee today to discuss the Trump campaign’s contacts with Russian officials. POLITICO’s Darren Samuelsohn reports: “The closed-door session involving aides and senators has long been in the works, though the exact details of when the meeting would occur have remained under wraps until now. Trump Jr. was called to publicly testify before the Senate committee in July, but the president’s oldest son instead offered to conduct both a private interview and hand over documents for committee investigators. Alan Futerfas, Trump Jr.’s attorney, confirmed in an email to POLITICO the interview would take place on Thursday.” Full story here.

— Darren also reports: “Facebook says Russian-linked accounts bought election ads”: “Facebook accounts with apparent Russian ties purchased about $150,000 in political ads aimed at American voters during key periods of the 2016 presidential campaign, according to a new analysis released Wednesday by the social networking company. The internal Facebook findings — which it said in a blog post it had already turned over to U.S. authorities — comes as the Silicon Valley giant faces intense scrutiny from special counsel Robert Mueller and congressional committees concerned about how both real internet trolls and fake news bots preyed on U.S. voters during last year’s election.” Full story here.

— Good government groups immediately looked at the FEC: The Facebook report indicates the agency should be more aggressive on Russian election interference, they argue. “The Commission’s intransigence on the issue of curbing the threat of foreign influence in our elections must stop now as this is likely only the tip of the iceberg,” Common Cause President Karen Hobert Flynn said in a statement.

Days until the 2017 election: 61.

Days until the 2018 election: 425.

Thanks for joining us! You can email tips to the Campaign Pro team at sbland@politico.com, eschneider@politico.com, krobillard@politico.com, dstrauss@politico.com and mseverns@politico.com.

You can also follow us on Twitter: @politicoscott, @ec_schneider, @politicokevin, @danielstrauss4 and @maggieseverns.

RETIREMENT SIREN — “Reichert to retire from House after this term,” by Campaign Pro’s Elena Schneider: “Rep. Dave Reichert (R-Wash.) announced he would not run for another term on Wednesday, opening a key pickup opportunity for Democrats for a seat that hasn’t backed a Republican presidential candidate in years. … Reichert, who was first elected in 2004, has frustrated Democrats for more than a decade by holding on to the central Washington seat, even as Democratic presidential candidates continued to win the district.” Full story here.

— Of note: The Cook Political Report swiftly moved Reichert’s district all the way from “likely Republican” to “toss up” after the announcement.

FIRST IN SCORE — NRSC targets Casey in digital ad: The NRSC is running a digital ad attacking Democratic Sen. Bob Casey as a flip-flopper. “The 2006 Bob Casey is gone,” a male narrator says. “The new Bob Casey is just another Washington liberal.” The ad notes Casey’s 100 percent rating from NARAL and support for Manchin-Toomey. Watch the ad here.

OUCH — “Biss Drops Ramirez-Rosa From Ticket in Bid for Illinois Governor,” by NBC5’s Mary Ann Ahern and Shelby Bremer: “Biss announced the change to his ticket less than a week after revealing Ramirez-Rosa as his choice for lieutenant governor, and after backlash — including a lost endorsement — over Ramirez-Rosa’s past comments on Israel. Congressman Brad Schneider withdrew his support for Biss’ campaign Sunday, citing concerns about Ramirez-Rosa’s ‘past comments about the United States support of our ally Israel, and his affiliation with a group that is an outspoken supporter of the Boycott, Divestment and Sanctions movement against Israel.’ The group Schneider was referring to is the Democratic Socialists of America, a political activism organization that is, according to its website, the largest socialist organization in the country.” Full story.

ADS ADS ADS — SLF runs first digital ad against McCaskill: The Senate Leadership Fund launched its first digital ad against Missouri Sen. Claire McCaskill on Wednesday. The ad, backed by a $5,000 buy, focuses on last spring’s flap over McCaskill’s contact with Russian officials and dubs her “comrade Claire.” Read more in The Hill.

— Not One Penny, a liberal group fighting tax reform, pressured Heitkamp with a five-figure television ad buy ahead of Trump’s visit. Watch it here.

YOUR DAILY ROLL TIDE — Endorsements edition: “U.S. Chamber of Commerce endorses Strange,” by POLITICO’s Daniel Strauss: “The U.S. Chamber of Commerce is endorsing Sen. Luther Strange in the Republican runoff for the Alabama special Senate race, a top Republican with knowledge of the move confirmed to POLITICO. The endorsement comes just 20 days before the runoff between Strange and former state Chief Justice Roy Moore. The move marks another major establishment-aligned Republican group backing Strange and bucking Moore.” Full story here.

— Meadows endorses Moore, Strauss reports: House Freedom Caucus Chairman Mark Meadows endorsed former Alabama Chief Justice Roy Moore for the Senate on Wednesday, delivering another conservative boost to Moore in the hotly contested primary. Full story here.

IN THE COURTS — Lawmakers file brief opposing gerrymandering: “Arnold Schwarzenegger’s push for nonpartisan redistricting gained significant Republican support on Tuesday, with Ohio Gov. John Kasich signing on to his amicus brief at the Supreme Court and Arizona Sen. John McCain filing a separate friend-of-the-court brief,” POLITICO’s Edward-Isaac Dovere reports. “The court is scheduled to hear a case in October, Gill v. Whitford, that could abolish partisan gerrymandering. Schwarzenegger, the former California governor, has made gathering support for it a priority. He spent last week calling members of Congress and governors directly, urging them to sign on.”

YOUNG GUNS — Heller and Flake are much younger than previous GOP senators facing primaries, SmartPolitics notes: University of Minnesota professor Eric Ostermeier notes Nevada Sen. Dean Heller and Arizona Sen. Jeff Flake are different than previous GOP senators who faced serious primary challenges in two major ways: They’re much younger, and have spent much less time in the Senate. “The average age of the aforementioned 10 Republicans at the time of their primary challenge was 74.6 years,” Ostermeier writes. “By contrast, Heller will be 58 and Flake 55 at the time of their 2018 primaries.” Most challengers were a decade younger than senators they ran against. Previous senators facing tough primaries had served an average of 25 years in the upper chamber, much longer than Heller and Flake. Full story.

QUOTE OF THE DAY: “You listening, Heidi? She’s listening. She heard that. We’re not going to put her on the spot. I’m not doing it.” — President Donald Trump, while speaking about tax reform in North Dakota on Wednesday with Heitkamp in attendance.

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Menendez trial begins

With Zach Montellaro, Kevin Robillard and Elena Schneider

The following newsletter is an abridged version of Campaign Pro’s Morning Score. For an earlier morning read on exponentially more races — and for a more comprehensive aggregation of the day’s most important campaign news — sign up for Campaign Pro today. (http://ift.tt/1rYrnXl)

Story Continued Below

HAPPENING TODAY — Menendez trial begins: Sen. Robert Menendez will face corruption charges in a federal courtroom in Newark, N.J., this morning. Menendez faces eight counts of bribery, three counts of fraud and one count of conspiracy, and one count of violating the Travel Act. The New Jersey Democrat has continued to serve in the Senate as his trial crawled to its start — but if Menendez is convicted, Republicans will seize the opportunity to attempt to push him out of the Senate and allow New Jersey Gov. Chris Christie to appoint a GOP successor.

POLITICO’s John Bresnahan will get you smart, fast: “Menendez’s relationship with Dr. Salomon Melgen, a close friend and donor, first came under scrutiny in early 2013 after media reports revealed that the New Jersey Democrat was flying on Melgen’s plane to the doctor’s ‘luxurious’ villa in the Dominican Republic. Menendez did not report any of the flights, a potential violation of Senate rules and federal law,” Bres writes. “Melgen and his family members donated hundreds of thousands of dollars in campaign contributions directly to Menendez’s reelection campaign, as well as to a Democratic super PAC that backed Menendez’s 2012 reelection effort. … Menendez has made a variety of arguments to try to rebut the government’s case, and his high-powered defense team — led by Abbe Lowell, a well-respected defense attorney who first came to prominence during former President Bill Clinton’s impeachment trial in 1998 — will use any legal weapon it can.” Full story here.

— “GOP launches aggressive effort to pressure Bob Menendez to resign if convicted,” by USA Today’s Herb Jackson: “The effort by the Republican National Committee will be aimed at the New Jersey senator’s fellow Democrats, including Minority Leader Chuck Schumer of New York; senators running for reelection in states that [President Donald Trump] won last year; and those with potential aspirations for the presidency in 2020, such as Sens. Cory Booker of New Jersey and Elizabeth Warren of Massachusetts.” Full story. Watch the ad here.

Q&A — The Club for Growth sits down with Morning Score: President David McIntosh and Vice President Andy Roth chatted with our Elena Schneider about 2018 and lessons learned from recent election cycles:

“What primaries are you excited about? McINTOSH: A couple of these Senate races will have tremendous potential. Our polling shows incumbent Democrats in Ohio, Montana, Missouri and Wisconsin are vulnerable if they toe the party line that [Sen. Chuck] Schumer’s laid out by opposing Trump on all things. The key is getting a good, articulate Republican in those races.

Does it feel different this year? So far, it seems like so far you’re on the same page with a lot of other Republican groups. … McINTOSH: It is not a coincidence in the following way — last year, we invested in expanding our operation by adding scouts. … At the beginning of the year, we identified the Trump states with a Democratic incumbent, and we directed the scouts, ‘Go figure out who would be a good candidate.’ … The other thing that’s benefited in this is that the Club isn’t perceived to Senate leadership as one of their enemies in the Republican Party. Before I got here, Andy stayed out of the Kentucky primary. That is the history and it was noted by the majority leader because he told me so.

When you’re thinking about primaries, how do you factor Trump getting involved, like he did in Alabama? McINTOSH: We want to consider it. My read on the Alabama one is that was a favor to Mitch McConnell, who had invested a lot of his political capital in reelecting Strange. … I don’t expect it happening a lot. … ROTH: In all of the polling we do, he remains very popular among primary Republican voters. But none of the current races we’re in – except maybe Wisconsin — is that a concern. …

Do you expect to have the same level of financial investment in 2018 as you did in the last cycle? ROTH: Our stated goal is always to get involved in more races than we did in the previous cycle, or at least to have a bigger impact.” Read the full Q&A here.

NEW THIS A.M. — Koch network launches seven-figure TV buy in Va., by POLITICO’s Kevin Robillard: “Americans for Prosperity is out with a seven-figure TV and digital ad blitz attacking Democratic Lt. Gov. Ralph Northam in Virginia’s gubernatorial race, part of a multimillion-dollar campaign in the state. The group, backed by the powerful Koch brothers’ network of conservative donors, is attacking Northam for missing meetings of the Virginia Economic Development Partnership, which later gave $1.4 million to a fake Chinese company. Full story here.

— Northam talks economic growth in new ad: “Democratic Lt. Gov. Ralph Northam’s Virginia gubernatorial campaign is out with a new ad contrasting his plan for economic growth with Republican Ed Gillespie’s approach,” Robillard reports. Full story here.

Days until the 2017 election: 62.

Days until the 2018 election: 426.

Thanks for joining us! You can email tips to the Campaign Pro team at sbland@politico.com, eschneider@politico.com, krobillard@politico.com, dstrauss@politico.com and mseverns@politico.com.

You can also follow us on Twitter: @politicoscott, @ec_schneider, @politicokevin, @danielstrauss4 and @maggieseverns.

FIELD OF DREAMS — CLF launches six new field offices: The Congressional Leadership Fund is opening six more field offices in House districts, bringing the total number of CLF field offices up to 17. The new offices will be in the following members’ districts: Rep. Mike Bost (IL-12), Rep. Kevin Yoder (KS-03), Rep. Ryan Costello (PA.-06), Rep. Brian Fitzpatrick (PA-08), Rep. Tom MacArthur (NJ-03) and Rep. Leonard Lance (NJ-07). CLF says it has made 2 million voter contacts so far this cycle.

PAC ATTACK — Nevada governor’s race heats up: Treasurer Dan Schwartz entered the GOP gubernatorial primary on Tuesday — and was greeted by a conservative super PAC that hopes to sink his bid. American Integrity Project, a group that supports a likely bid from Attorney General Adam Laxalt, is out with radio and digital ads that say Schwartz “hasn’t spent much time in Nevada, and it shows,” adding that “Schwartz made millions in finance in New York, maybe that explains why he’s so out of step with Nevada conservatives when it comes to taxes and spending.” Listen to the ad here.

— There’s polling data, too: American Integrity Project also released a polling memo from WPA Intelligence that found Laxalt, who hasn’t launched his bid yet, leading in a head-to-head contest with 64 percent of the GOP primary vote to Schwartz’s 5 percent. Nearly a third of voters are undecided. Laxalt also holds a lead in name recognition. “We plan to ensure that Schwartz’s latest campaign fails as spectacularly as his ill-conceived, publicity-seeking alternative budget gimmick failed back in 2015,” said Brian Baker, senior adviser to the group. Read the full polling memo here.

ABOUT LAST NIGHT — “Appeals court, 2-1, gives Texas OK to use new voter ID law,” by POLITICO’s Josh Gerstein: “A divided federal appeals court has stayed a lower judge’s ruling barring Texas from implementing a revised version of its voter identification law. A panel of the New Orleans-based 5th Circuit Court of Appeals voted, 2-1, to allow Texas to use the revised voter ID measure known as SB 5 for this November’s elections. ‘The state has made a strong showing that it is likely to succeed on the merits. SB 5 allows voters without qualifying photo ID to cast regular ballots by executing a declaration that they face a reasonable impediment to obtaining qualifying photo ID.” Full story here.

DAILY ROLL TIDE — Strange changes course on filibuster, by POLITICO’s Daniel Strauss: Sen. Luther Strange reversed course on the Senate filibuster, writing a new letter to McConnell and Schumer backing Trump’s position of ending the 60-vote threshold. Strange signed on to an April letter asking leaders to preserve the rule. Full story here.

“Moore to meet with Club for Growth,” Strauss reports: “Former Alabama chief justice Roy Moore is set to meet with Club for Growth officials on Wednesday, multiple sources confirmed to POLITICO. The meeting comes as Moore faces Sen. Luther Strange in the GOP runoff in the special election for now-Attorney General Jeff Sessions’ former Senate seat.” Full story here.

TOP CONTENDER IN MAINE — “Lisbon’s Garrett Mason to announce run for governor,” by The Portland Press Herald’s Scott Thistle: “State Sen. Garrett Mason is set to announce his bid for the governor’s office on Wednesday, making him the second Republican to enter an increasingly crowded race for the Blaine House in 2018.” Full story.

UN-ENDORSEMENT CORNER — “Rep. Schneider Withdraws Endorsement of Daniel Biss,” by NBC5’s James Neveau: “Congressman Brad Schneider has withdrawn his endorsement of Illinois gubernatorial candidate Daniel Biss after concerns emerged about the candidate’s running mate’s stances on the United States’ relationship with Israel. In a Facebook post Sunday night, Schneider said that he was ‘surprised’ to learn that Biss’ running mate, Carlos Ramirez-Rosa, a Chicago alderman, was a supporter of the Boycott, Divestment, and Sanctions (BDS) movement. … During their recent convention in Chicago, the Democratic Socialists of America, which Ramirez-Rosa joined in March 2017, passed a resolution in support of the BDS movement against Israel.” Full story.

FOR YOUR RADAR — “Heitkamp to hitch a ride with Trump on Air Force One,” by POLITICO’s Burgess Everett: “President Donald Trump is giving Heidi Heitkamp far warmer treatment than he gave Claire McCaskill. The president will host Heitkamp (D-N.D.) on Air Force One on Wednesday as they travel to North Dakota for Trump’s event on tax reform, suggesting that Trump won’t attack the vulnerable Heitkamp as he did similarly imperiled McCaskill in Missouri last week. Heitkamp told reporters that she opposes some of the tax policies the Trump administration has been floating, like taxing 401(k) accounts, but that she’s been in regular contact with chief economic adviser Gary Cohn and other administration officials.” Full story here.

— “Trump campaign urges court to toss out WikiLeaks hack lawsuit,” by Darren Samuelsohn: “President Donald Trump’s attorneys on Tuesday asked a federal judge to toss out a Democratic-driven lawsuit that accuses his 2016 campaign of conspiring with Russian operatives to publish stolen Democratic National Committee information on WikiLeaks. The case, filed in July by two Democratic Party donors and a former DNC staff member, contends that both the Trump campaign and longtime Trump adviser Roger Stone invaded their privacy by working with Russia to disseminate the hacked DNC emails and other campaign files that became an embarrassing but central storyline during the closing months of the 2016 presidential race.” Full story here.

TAKE BACK THE RADIO — Wisconsin GOP attacks Evers with radio ad: The Republican Party of Wisconsin is out with a radio ad attacking Democratic State Schools Superintendent Tony Evers, who is challenging Gov. Scott Walker, for refusing to revoke the teaching license of a man who was found guilty of spreading pornography at school. Listen to the ad here.

QUOTE OF THE DAY: “They just came back from a three-week vacation. I think that they should be rested and ready to take on some big challenges that America faces.” — White House spokesperson Sarah Huckabee Sanders calling on Congress to pass parts of Trump’s agenda.

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