by Greg Valliere, AGF Management Ltd.
Insights and Market Perspectives
Author: Greg Valliere
October 26, 2020
CHANCES OF A “BLUE WAVE” have increased, but there’s an important caveat — several Democrats poised to win Senate seats are moderates who won’t align with the party’s progressives. Maybe there will be a light blue wave.
WE THINK THE DEMOCRATS NEED A CUSHION: A 50-50 tie or a 51-49 majority wouldn’t be sufficient to get a progressive agenda through the Senate. We think the Democrats would need 52 or 53 seats, a tall order unless there’s a Biden landslide, which we don’t expect.
BY OUR COUNT, there are two Democratic moderates already in the Senate who the party can’t always count on — Jon Tester of Montana and Joe Manchin from West Virginia, the ultimate fossil-fuel state. Manchin is in line to become Chairman of the Senate Energy Committee if Democrats take the Senate.
THEN ADD ANOTHER COUPLE OF DEMOCRATC moderates who are poised to win next Tuesday, perhaps in Arizona, Colorado, North Carolina or Iowa, which means the party might be unable to pass progressive issues such as packing the Supreme Court or ending filibuster rules.
THE KEY ELEMENT OF A “BLUE WAVE” obviously is winning the White House, and Joe Biden still appears to be in good shape despite his debate gaffe on oil and allegations of corruption in his dealings with Ukraine and China. Biden got through the weekend in pretty good shape; betting odds of his victory jumped to 66% after slumping a bit after the debate.
THE DOMINANT CAMPAIGN ISSUE is still the raging coronavirus; the number of new infections may be partly because of extensive testing, as Donald Trump contends, but surging hospitalizations indicate that we’re not “rounding the bend,” as he claims. It’s getting worse, here and abroad.
THE LAST THING TRUMP NEEDED was an eruption of new cases within the White House, but several positive cases in the Vice President’s staff were disclosed (belatedly) by Chief of Staff Mark Meadows. He conceded yesterday that “we’re not going to control” the virus, which Biden promptly said was “raising the white flag.”
SO IT’S STILL ABOUT “covid, covid, covid, covid,” as Trump complained this weekend; Biden’s gaffe didn’t get as much traction as the White House hoped — perhaps because there are far more workers in the alternative energy sector than in the oil industry in Pennsylvania and Texas.
TEXAS PRODUCED ONE OF THE WEEKEND’S SURPRISES: A poll by the Dallas Morning News showed Biden leading there by 3 points. We wouldn’t bet on Biden winning Texas, but the possibility of a very close outcome there will force the Trump campaign to devote resources in a state they had considered a lock.
WITH JUST OVER A WEEK LEFT in the campaign, it would take a major new development — a fresh scandal, a huge gaffe, a Russian hack, or a health issue for one of the candidates — to alter the trajectory.
ARE THE POLLS SIMPLY WRONG? They may exaggerate Biden’s support, but even if his nationwide lead of 8 points is cut in half, he’s the front-runner to easily capture the popular vote. The Electoral College looks close — so close that a disputed outcome is still possible.
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.
