by Greg Valliere, AGF Management Ltd.
Insights and Market Perspectives
Author: Greg Valliere
September 21, 2020
CHANGING THE SUBJECT: Donald Trump’s terrible polls on his handling of the pandemic had made him the underdog in the election — unless there was a way to change the subject. Sure enough, the nation will now debate abortion, Obamacare, and the Supreme Court.
TRUMP IS STILL THE UNDERDOG, because the extraordinary legacy of Ruth Bader Ginsburg has energized female voters and produced a $100 fundraising windfall in the past 48 hours.
BUT EVERYTHING NOW SEEMS SCRAMBLED, from the stalled Covid aid bill to health care, as a potentially disputed election looms in just six weeks. Here are five key take-aways:
1. REPUBLICANS AREN’T GUARANTEED of getting enough support for a floor vote on Ginsburg’s replacement. Mitch McConnell immediately lost Susan Collins and Lisa Murkowski, as expected, but there will have to be two more defectors, a tall order. Maybe Mitt Romney or Corey Gardner could bolt, but we doubt the latter. A long-shot is Sen. Chuck Grassley, who despises Trump, in private.
2. THE LEGISLATIVE OUTLOOK IS CHAOTIC: Democrats are furious at what they see as hypocrisy — McConnell wouldn’t even meet with Merrick Garland eight months before an election. So it’s possible that Democrats may retaliate by grinding the Senate to a halt, jeopardizing a pandemic aid bill. Even a government shut-down on Oct.1 can’t be ruled out.
3. A NOMINATION BY FRIDAY: Trump may not even wait until the Ginsburg funeral — a nominee will be announced within days, with two clear front-runners: Amy Coney Barrett and Barbara Lagoa; the latter might help win Hispanic votes for Trump in Florida, but Barrett is the clear favorite among anti-abortion activists; she once argued that even if a fetus is shown to have Down Syndrome, she would oppose termination of the pregnancy.
4. JOE BIDEN, SUBDUED: As Democrats in Washington expressed outrage over McConnell, the Democrats’ nominee reacted almost passively on Friday night, and yesterday he urged both sides to “de-escalate.” And Biden’s camp sent a message to progressives to refrain from urging filibuster reforms or packing the Supreme Court. “Sleepy Joe” is a devastatingly accurate Trump nickname for the Democrats’ nominee.
5. ELECTION IMPACT: Until last Friday night, only about 10% of the electorate hadn’t made up its mind. But turnout and enthusiasm are a huge variable, and our take is that women — especially women under the age of 40 — are now far more motivated to vote. The Trump base already was locked in; now it’s possible that lukewarm Biden supporters will vote, largely out of concern over Roe v Wade and the upcoming Supreme Court ruling on Obamacare.
BOTTOM LINE: Odds favor Trump and McConnell getting their Supreme Court pick, probably before the election; let’s call it a 60-40 likelihood. But it may be a pyrrhic victory, because the likely election outcome — a narrow Biden victory and a GOP loss of the Senate — looks more plausible this morning than it did last week.
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.
