by Greg Valliere, AGF Management Ltd.
Insights and Market Perspectives
Author:Â Greg Valliere
July 9, 2020
CONGRESS MAY BE GONE for another week, but four major political stories are in the limelight this morning:
1. JOE BIDEN SPEECH: The former vice president will emerge from his basement today for a major speech in Scranton, Pa. He will focus on reviving the economy, according to a piece on the Bloomberg web site this morning. From what weâve seen, there are a couple of major take-aways . . .
FIRST, BIDEN APPARENTLY WILL ENDORSE an Elizabeth Warren proposal to use the federal procurement process to implement a âBuy Americanâ policy that would be clearly aimed at China.
SECOND AND MOST INTRIGUINGLY, Biden will not focus on tax increases. We think he knows that the economy wonât be back on its feet in early 2021, so why rush tax hikes that could antagonize the markets and slow the recovery? If Biden wins, we think tax hikes would come later rather than sooner.
2. TRUMP VS. THE SCIENTISTS: Despite overwhelming evidence that much of the Sunbelt opened up too early, Donald Trump is un-deterred; not even a major spike in Covid-19 cases in Tulsa will prevent the next brawl, over opening up schools this fall. Trumpâs re-election prospects may hinge on how he handles the school issue.
ITâS UNCLEAR whether Trump has the authority to withhold funding from schools that donât re-open, but he is demanding that the Centers for Disease Control ease its guidelines. Trump will now own the issue of school openings, and the media surely will pounce if there are new infections. Meanwhile, Trump and Dr. Anthony Fauci seem close to a divorce.
3. THE SUPREME COURT ON TRUMPâS TAXES: The high court will release all remaining decisions today, as it heads to its summer recess. That means there will be rulings in three cases on whether Congress and New York prosecutors have a right to examine the presidentâs tax returns and other financial records.
THIS WILL BE A BIG DEAL: If Trump prevails or if the outcome is inconclusive, this will be confined to a one-day news spin. Or the president could be forced into an embarrassing release of records. Weâd guess that he paid little or no taxes â thatâs generally assumed â but the big news could involve his dealings with Deutsche Bank and Russian oligarchs.
4. CAN YOU BELIEVE THE POLLS? Polls released early this month showed a huge lead for Biden, who was up by an incredible 14 points in a New York Times poll. Now comes a new survey yesterday by TheHill.com, showing Biden ahead by only 4 points. Who to believe? Methodology is crucial â especially when polltakers try to factor in voter turnout.
WE CONTINUE TO RECOMMEND the daily aggregate of all polls, published on the RealClearPolitics web site. The RCP average this morning showed Biden ahead by 8.7 points. The web site also lists betting odds, which give Biden a 57% chance of winning.
BUT THE WIDE DISPARITY IN RECENT POLLS â and the relatively close numbers in key states â persuades us that while Biden may be the front-runner, heâs hardly a shoo-in.
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), 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 is registered as a 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. AGFâs 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.
© 2020 AGF Management Limited. All rights reserved.
This post was first published at the AGF Perspectives Blog.
