by Greg Valliere, AGF Management Ltd.
A QUESTION WE GET FREQUENTLY is whether Donald Trump has a chance to rally and win re-election; it’s a still not out of the question despite Joe Biden’s lead of about 10 points. With some pundits predicting a landslide — which we think is unlikely — let’s play devil’s advocate this morning and look at how Trump could still win . . .
The polls could be wrong: Most polltakers have improved their methodology on the composition of respondents — they get the correct mix of rich-poor, male-female, young-old, etc. But are the polltakers correct on turnout? If it’s cold and windy on Nov. 3 in Columbus, Ohio, will lukewarm Biden supporters stay at home? The Trump base will turn out in a hurricane.
Biden’s gaffes: Trump is increasingly outspoken about Biden’s mental acuity, suggesting yesterday that the former vice president belongs in a nursing home. Biden occasionally says he’s running for the Senate, and recently could not remember the name “Mitt Romney,” referring to him as “the Mormon.”
A truly damaging Biden gaffe could come in a debate, but Trump got finessed out of participating in the second debate, which could have helped him. Trump has only one chance left; let’s see if he lets Biden talk and talk in the final debate. Trump needs a major gaffe from Biden, but the president is perfectly capable of his own gaffes.
Back on Message: Instead of getting into a fight with Dr. Anthony Fauci, Trump needs to stay on message, attacking the Biden agenda as veering sharply to the left, with plenty of tax hikes. Yet Trump exasperates his aides — he seems incapable of staying on message; he rises to the bait whenever anyone attacks him.
A stimulus bill: With the economy showing signs of softening, enactment of a major stimulus bill could give Trump a badly needed victory. Nancy Pelosi knows this, and she won’t listen to anyone who suggests that she should accept a $1.8 trillion deal from Steve Mnuchin.
Pelosi seemed to go off the rails in a CNN interview yesterday with Wolf Blitzer; her restive troops want to deal, but she erupts when people like Blitzer accuse her of stonewalling. A deal could help Trump, but most Republicans were aghast at the Mnuchin price tag; they won’t accept anything close to $1 trillion, which means Trump is unlikely to get a compromise.
A Wild Card: There’s still time for a geopolitical crisis or a made-for-TV event that Trump could exploit; he’s a clever campaigner — as we always say, “you underestimate Trump at your own peril.” But it’s getting late in the game for a Hail Mary pass.
Victory in the courts? There’s little chance Trump could win the popular vote, so his best hope is that he gets close to a tie in the Electoral College; Biden’s lead in the battleground states is not insurmountable. Then Trump would instruct Attorney General William Barr to litigate, taking a case up to the Supreme Court, claiming fraud in mail-in ballots.
TRUMP HAS TREMENDOUS ENERGY, and he will out-work Biden; he certainly out-worked Hillary Clinton. We think the polls will narrow, as they did in 2016. But as we wrote yesterday, this isn’t 2016 — Trump has lost the fundraising battle, and he trails badly among women and, surprisingly, senior citizens.
YET THERE’S STILL UNEASINESS among Democrats in this town when Biden gets his words mixed up, and his supporters worry that the polls could be exaggerating his lead. Trump obviously is the underdog, but here’s still a chance that he could close the gap rapidly in the next three weeks.
The views expressed in this blog are those of the author and do not necessarily represent the opinions of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies.
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. 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.
© 2020 AGF Management Limited. All rights reserved.
This post was first published at the AGF Perspectives Blog.
