by Greg Valliere, AGF Management Ltd.
Insights and Market Perspectives
Author: 8
October 22, 2020
THE BIDEN MOMENTUM: With less than two weeks to go, elections sometimes
break decisively toward one candidate, and that seems to be happening now. Joe Biden is pulling ahead in Pennsylvania, and his path toward 270 electoral votes is coming into focus.
DONALD TRUMP NEEDS A KNOCKOUT TONIGHT: A modest Trump victory won’t make much of a difference because the electorate seemingly has made up its mind. Reports of foreign interference in the election may not make much of a difference, and neither will reports of Hunter Biden’s activities in Ukraine.
WHAT MAKES A DIFFERENCE IS PENNSYLVANIA: Fresh polls give Biden a clear lead in the Keystone state, so it’s no surprise that Trump slumped yesterday on Las Vegas betting sites. If Biden sweeps Minnesota, Wisconsin, Michigan and Pennsylvania, he’s headed for the presidency; he can afford to lose Ohio, Florida, North Carolina and Georgia.
CLOSING ARGUMENTS: GOP insiders are puzzled by Trump’s inability to lay out a second term agenda; he can’t simply rant about how bad things are — he’s the incumbent, after all. If Trump talks about specific issues — especially the economy — he could help his cause tonight.
ALL BIDEN HAS TO DO is insist that he has a plan to confront Covid and improve the economy. He doesn’t even have to be specific, he just needs to avoid gaffes; a tie would be a victory for him. If Pennsylvania and Michigan are slipping away from Trump, Biden can run out the clock.
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STIMULUS BILL — WAIT UNTIL 2021? Even if Nancy Pelosi and Steve Mnuchin reach a deal today, time may have run out; it’s not clear that Congress would have enough time to write a final bill before the election.
OF ALL THE LEGISLATIVE BATTLES WE’VE COVERED, this one makes the least sense. A deal is within reach, but neither side can take yes for an answer. Several of Mitch McConnell’s vulnerable Republican Senators — Maine Sen. Susan Collins in particular — could benefit if there’s a bill. Yet McConnell isn’t interested in a deal.
IT’S DUBIOUS THAT A $2 TRILLION BILL could pass in the lame duck session; Trump wouldn’t need a deal by then. Thus it’s possible that a stimulus bill may not pass until after the Jan. 20 inauguration — and if nothing moves until then, a significant economic slowdown is likely.
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This post was first published at the AGF Perspectives Blog.
