by Greg Valliere, AGF Management Ltd.
Insights and Market Perspectives
Author: Greg Valliere
August 27, 2020
POLITICAL CONVENTIONS ARE SUPPOSED to fire up the base, praise the nominee, demonize the opposition and play fast and loose with the truth. That’s to be expected. But on the final night, voters want to know if there’s a plan for the next four years.
THE DEMOCRATS WERE MORE CONCERNED about how Joe Biden would perform, and he passed that test. But he didn’t offer much of a plan. Now there’s a genuine opportunity for Donald Trump — rather than state what he’s against, he needs to talk about his second term.
EVEN TRUMP SUPPORTERS ARE DISMAYED that he hasn’t laid out an agenda. He had an opportunity when Sean Hannity asked him earlier this summer what his plan is for a second term. Trump whiffed, unable to provide specifics.
WHEN WE MEET WITH CLIENTS, a persistent question is what investors can expect in a second term. Our response: maybe infrastructure spending, more reliance on trade tariffs, building the wall, making tax cuts permanent, etc. Will Trump put some meat on those bones tonight?
IF HIS SPEECH IS SIMPLY A SCREED against rioters, socialism, China, tax hikes and the rest, that would be a lost opportunity for Trump. His base is solid; he needs to tell the rest of the country what he will do in a second term.
IF HE DOESN’T, THIS CONVENTION WILL BE QUICKLY FORGOTTEN — it was well-produced, with venues like the White House and Fort McHenry, with some pretty good speeches (Nikki Haley and Tim Scott) and some awful ones (Kimberly Guilfoyle and Larry Kudlow).
THE NEWS HAS OBSCURED THE CONVENTION — a monstrous hurricane, still another indefensible police shooting of a black man, more urban unrest, and the adoption of controversial new Covid guidelines by the CDC while Anthony Fauci was hospitalized.
TRUMP HAS MADE THE CONVENTION all about him; he craves the spotlight that will shine on him tonight. So he needs to make the most of it or he will leave with only a one or two point bump, just as Biden did.
TRUMP NEEDS MORE than a slight bump; he’s trailing Biden by about 7 points nationally, (less in key battleground states). Biden is hearing from party veterans who want him to go on the offensive, and he will.
BOTTOM LINE: If Trump has a solid night, we’ll probably enter September with Biden ahead by 5-to-7 points. That’s hardly an insurmountable lead, with California and New York giving the Democrats at least 3 points of that total.
BIDEN IS AHEAD IN ENOUGH STATES to win about 300 electoral votes (270 are needed). That’s a gap that Trump could narrow quickly after the first debate, on Sept. 29. His comeback depends on a strong performance tonight.
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This post was first published at the AGF Perspectives Blog.
