by Greg Valliere, AGF Management Ltd.
Insights and Market Perspectives
Author: Greg Valliere
November 6, 2019
WE’RE NOT INCLINED to make sweeping conclusions after off-year elections, but there’s no question that last night’s results — and a stunning new Washington Post poll — are a wake-up call for President Trump and the Republicans. “Trump fatigue” may be setting in, we suspect.
THESE FRESH STORM WARNINGS persuade us that Trump — at best — is a very narrow favorite in the 2020 election. A pervasive view on Wall Street that he’s the clear front-runner may have to be revised today. We do not think this new narrative changes the impeachment scenario — with Trump likely to win acquittal in a Senate trial — but it may make Republicans less outspoken in his defense.
BEFORE LOOKING AT LAST NIGHT, a quick summary of this morning’s Washington Post poll. It shows Trump losing by an astonishing 17% to Joe Biden, 15% to Elizabeth Warren and 14% to Bernie Sanders; polls late this summer showed those three Democrats only narrowly ahead.
MORE OMINOUSLY FOR TRUMP, some of the internals look especially alarming. He’s tied with Biden at 47% among men, but trails by 64-33 among women. His support among Republicans, which had gotten near 90% in the past year, is now down to 80%, and the Post poll shows him losing by 17 points among independents. His support in another key demographic — non-college educated whites — has plunged from 36% in the election to 18% now.
THE ECONOMY IS STILL A PLUS FOR TRUMP, with a plurality — 44% — saying it has improved since the election, but our guess is that this new poll and last night’s results will make him far more inclined to cut a deal — any deal — with China on trade.
PERHAPS THE BIGGEST WARNING SIGNAL FOR TRUMP is attitudes on him personally. Only 31% of respondents say he’s honest and trustworthy, while only 36% say he has the kind of personality and temperament required to run the country.
THESE POLL RESULTS SEEMINGLY WERE CONFIRMED last night as Republicans lost the suburbs and independents in Virginia, where both houses of the state’s General Assembly will now be controlled by Democrats. And in Kentucky, one of the most conservative states in the nation, hard-line incumbent GOP Gov. Matt Bevin is trailing this morning. He sought to make the election a referendum on impeachment, and Trump strongly endorsed Bevin in a rally on Monday.
HOW WILL REPUBLICANS REACT? The player to watch is Mitch McConnell, who’s the front-runner to win re-election in Kentucky, but he’s no longer the overwhelming favorite after last night’s results. He and other Republicans will urge Trump to tone down the tweets and appeal to moderates who apparently are flocking away from him in droves. Will Trump get the message?
MUCH WILL CHANGE IN THE COMING MONTHS, and the Democrats’ front-runners have flaws that Trump will adroitly exploit. But our main take-away this morning is that Trump is in danger of losing the suburban center, which means he could be in trouble in Michigan, Pennsylvania and Wisconsin, three states he barely won in 2016.
IT’S WAY TOO EARLY
to predict Trump could lose next fall, but the easy win expected by the markets now looks unlikely.
The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.
AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), Highstreet Asset Management Inc. (Highstreet), AGF Investments America Inc. (AGFA), AGF Asset Management (Asia) Limited (AGF AM Asia) and AGF International Advisors Company Limited (AGFIA). AGFA is a registered advisor in the U.S. AGFI and Highstreet are registered as portfolio managers across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. AGF AM Asia is registered as a portfolio manager in Singapore. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
For further information, please visit AGF.com.
© 2019 AGF Management Limited. All rights reserved.
This post was first published at the AGF Perspectives Blog.
