Senate Minority Leader Mitch McConnell – who’s been widely criticized for ‘blowing‘ the midterm election by abandoning Trump-endorsed Arizona candidate Blake Masters – has been reelected as Senate GOP leader despite a challenge from Sen. Rick Scott.

If he completes this term, McConnell will be the longest-serving party leader in the history of the Senate.

Several senators had called for the election to be postponed, including Ted Cruz (R-TX), who wanted to offer a motion to delay until after the Georgia runoff. The effort failed, and McConnell beat Scott.

“I’m writing to you today because I believe it’s time for the Senate Republican Conference to be far more bold and resolute than we have been in the past. We must start saying what we are for, not just what we are against,” Scott said in a Tuesday letter to GOP colleagues, Fox News reports. “I do not believe we can simply continue to say the Democrats are radical, which they are. Republican voters expect and deserve to know our plan to promote and advance conservative values.”

“If you simply want to stick with the status quo, don’t vote for me,” the letter continued.

McConnell, meanwhile, got cocky.

“I have the votes. I will be elected,” he told reporters. “The only issue is whether we do it sooner or later.”

The leadership election comes at a tense time for Republicans, who are reeling from weak midterm elections. Despite a poor economy and favorable historical trends, they took just a miniscule majority in the House and failed to win the Senate. 

Former President Donald Trump also announced his 2024 presidential run Tuesday night, which will set up plenty of uncomfortable questions for Republicans for months to come. Trump has repeatedly called for McConnell’s ouster.

According to senators in the Tuesday GOP meeting, which dragged for about three hours and delayed Senate votes, the marathon session was filled with grievances as Republicans sought direction after the results of the 2022 vote. -Fox News

“A lot of frustration, lots of discussion,” said Sen. Lindsey Graham (R-SC) as he left the vote. “

According to Sen. Mike Braun (R-IN), around 20 people spoke at the meeting prior to the vote, with around half of them pressing for “something different.”

Authored by Simon White, Bloomberg macro strategist,

Retail stocks face becoming the poorest-performing sector as the cumulative impact from higher rates causes consumption to weaken further.

Tuesday was a reminder that markets remain vulnerable to geopolitical risks. Still, the inflation backdrop remains the market’s primary driver, and the interplay between real growth and rates will continue to be paramount.

The S&P is down almost 17% on the year, but this masks some big underlying sectoral differences. Energy and Oil and Gas are up on the year, yet almost every other sector is down. The worst-affected are some of the most interest-rate sensitive — tech, real-estate and homebuilders, and retail.

We get October retail sales data today, with expectations for a robust 1% m/m rise after a flat move last month. But retail sales and consumption face two strong headwinds.

First, credit is tightening as rates rise. Consumption is heavily reliant on credit, and banks’ willingness to make consumer loans is falling. As the chart below shows, this tends to lead to weaker retail sales.

Credit card debt has risen to new all-time highs in the US. But anecdotally, this is being used to fund the purchase of essentials as the cost of living rises, and thus does not represent a broad-based bulwark to consumer spending.

Second, housing costs are rocketing higher. Mortgage rates are at a 20-year high, weighing on affordability. As affordability falls, more disposable income will be channeled into mortgage repayments and less into consumption. The chart below shows this will be a significant headwind for retail sales over the next year at least.

Both Walmart and Home Depot announced earnings this week (Target is later today) that exceeded expectations. But the headwinds from higher rates are formidable. They operate with a lag, meaning their cumulative impact should have an increasingly negative impact on the economy.

Further, retailers still face a huge surplus in inventory after the pandemic that has led to the highest inventory-to-sales ratios in 15 years. Walmart noted its inventory position has significantly improved, but there are other retailers who will be faced with taking losses to clear up excess stock.

Retail is already one of the worst performing sectors this year, but it looks especially exposed to the twin blows of higher inflation and higher rates.