Warning signs

[View in browser]( [Bloomberg]( Follow Us [Get the newsletter]( Joe Biden’s plane touched down outside Washington this morning just as Republican Glenn Youngkin took the stage to declare victory in the governor’s race in Virginia, a state the president won by 10 percentage points exactly a year ago. In New Jersey, where Biden outperformed Donald Trump by an even wider margin in 2020, Democratic Governor Phil Murphy is locked in an unexpectedly tight contest with Republican challenger Jack Ciattarelli. The Democratic candidates’ performances are a bad omen for the party’s chances to keep control of Congress in midterm elections a year from now and could further complicate efforts to pass the president’s economic agenda. Biden’s approval ratings have been falling amid criticism of his handling of the pandemic and growing supply chain disruptions. Key Reading: - [GOP’s Youngkin Sends Democrats a 2022 Wake-Up Call From Virginia]( - [N.J. Governor Locked in Tight Race With GOP’s Ciattarelli]( - [Eric Adams Wins in NYC, Capping Ascent From Cop to Mayor-Elect]( - [Boston Elects Michelle Wu, First Woman of Color, as Its Mayor]( - [House Vote on Biden’s Agenda Imperiled by Moderate Democrats]( As [Mark Niquette]( and [Ryan Teague Beckwith]( explain, Youngkin shook off Democrats’ attempts to align him with Trump, even as the former president’s voters turned out to support him. The strategy returned some crucial suburban and independent voters to the GOP, potentially providing Republicans with a road map for the midterms. It’s also a setback for Biden, who returns from a six-day trip to Europe with Democrats still fighting over his $1.75 trillion tax and spending bill, despite a breakthrough yesterday on provisions aimed at lowering some prescription drug prices. The electoral outcomes are likely to leave Democrats spooked and on edge. That’s not an ideal environment for taking advantage of a closing window to pass major legislation before attention turns to the midterms.  [​​​]( — [Kathleen Hunter]([​​]( Youngkin last night. Photographer: Al Drago/Bloomberg Click [here]( to see our Bloomberg Politics website and share this newsletter with others too. They can sign up [here](. Global Headlines Side effects | Coal-fired power plants would be eligible for billions of dollars in extra tax breaks under Biden’s economic legislation if they install carbon-capture systems, an incentive that environmental groups say may [delay]( the retirement of dozens of facilities. - The focus today at the COP26 climate meeting is on the finance sector. [Click here]( to read about who holds one of the most important levers in the climate fight — money. - Institutions representing 40% of global financial assets have [pledged]( to meet the Paris goals. But while [“Net Zero”]( has become part of the lexicon, there’s no consensus on what it means. - You can [sign up]( to get the latest from Glasgow in your inbox every day until Nov. 12. Fine line | Chinese state media sought to douse online speculation that a [conflict]( with Taiwan may be imminent, seemingly fueled by a call for citizens to stockpile food and a message claiming to show China was preparing to mobilize military reserves. [This story]( sets out why it can be so tricky to manage public sentiment on Taiwan, even with China’s vast censorship powers. - The first official delegation of European Union lawmakers landed in Taiwan, [defying]( warnings from China that support for the democratically ruled island would have consequences. More provinces in China are [fighting]( Covid-19 than at any time since the deadly pathogen first emerged in Wuhan in 2019. The highly infectious delta variant is hurtling across the country despite the increasingly aggressive measures that local officials have enacted. Infections have been found in 19 of 31 provinces in the world’s second-largest economy. Best of Bloomberg Opinion - [Markets Can Help Fix the Climate: Michael Bloomberg, Mark Carney]( - [Climate Change Will End National Sovereignty: Andreas Kluth]( - [There’s an Unseemly Rush to Power EV Batteries: Anjani Trivedi]( Further hurdles | Russia’s Nord Stream 2 is complete, but it may take a few more months of red tape before the controversial pipeline begins pumping natural gas to Germany. With Europe’s energy crunch deepening, some officials there are accusing Russia of curbing supply to pile pressure on authorities to grant certification. [Patrick Donahue]( walks us through the process [here](. Den of cyberthieves | The crown jewel of Moscow’s business district, a 97-story glass tower, has been home to more than a dozen companies since 2018 that convert cryptocurrencies to cash, sometimes allowing criminals to launder profits from digital [crimes](. That adds to the perception Russia’s government tolerates some types of cybercrime, which has been at the heart of the Biden administration’s conflict with President Vladimir Putin. Defend the city | Ethiopia declared a state of [emergency]( as the escalation in the year-long civil war threatens to further destabilize the Horn of Africa region. The government called on residents to arm themselves and defend the capital after fighters from the dissident Tigray province captured key towns that lead to Addis Ababa. Empty streets in Addis Ababa on Nov. 2. Photographer: Minasse Wondimu Hailu/Anadolu Agency/Getty Images Bloomberg TV and Radio air Balance of Power with [David Westin]( weekdays from 12 to 1pm ET, with a second hour on Bloomberg Radio from 1 to 2pm ET. You can watch and listen on Bloomberg channels and online [here]( or check out prior episodes and guest clips [here](. Today former Virginia Governor Douglas Wilder joins to discuss the election results in his state and what they mean for the Biden administration. What to Watch - France’s ambassador to Australia yesterday said Prime Minister Scott Morrison’s government was [guilty]( of “deceit” and a “stab in the back” over a scrapped submarine deal. - The Taliban [banned]( the use of foreign currency in Afghanistan in a surprise move that could further weigh on an economy struggling with a cash crunch and widespread hunger. - South Africa’s ruling party may be heading for its [worst]( electoral showing since the end of apartheid in Monday’s municipal polls. - Sudan’s army and politicians are edging closer to a new [power-sharing]( deal as international efforts intensify to reverse last week’s coup. - Peru’s government [authorized]( the military to help police maintain order in Lima amid protests and a planned transport strike. And finally ... Hong Kong teenager Tony Chung has pleaded guilty to charges of [secession](, the third person to avoid fighting their case under a broad Beijing-drafted national security law at trial. Like Chung, 19, activist Andy Li and legal assistant Chan Tsz-wah entered guilty pleas in August for allegedly conspiring with media mogul Jimmy Lai to collude with foreign forces. Chung faces up to seven years in prison. Chung in 2020. Photographer: Isaac Lawrence/AFP/Getty Images  Like Balance of Power? [Get unlimited access to Bloomberg.com](, where you'll find trusted, data-based journalism in 120 countries around the world and expert analysis from exclusive daily newsletters. You received this message because you are subscribed to Bloomberg's Balance of Power newsletter. [Unsubscribe]( | [Bloomberg.com]( | [Contact Us]( [Ads Powered By Liveintent]( | [Ad Choices]( Bloomberg L.P. 731 Lexington, New York, NY, 10022