by Greg Valliere, AGF Management Ltd.
Insights and Market Perspectives
Author: Greg Valliere
October 13, 2020
WE’RE CONSTANTLY ASKED whether the last three weeks of the campaign will look like the last three weeks of 2016, when Donald Trump showed amazing energy and barnstormed across the country. Our answer: he still has a chance, but in key respects this doesn’t look like 2016.
FIVE DIFFERENCES . . .
1. MONEY, THE MOTHER’S MILK OF POLITICS: Joe Biden’s campaign, flush with cash, is spending far more on TV ads than Trump, who reportedly is furious over poor fundraising. If he loses, a lack of money — which wasn’t a problem in 2016 — will be a major factor.
2. UNCLE JOE, PERSONALLY POPULAR: To be blunt, many voters in 2016 simply didn’t like Hillary Clinton; she wasn’t a great campaigner, and seemed to have a sense of entitlement toward the presidency. Biden may not be a dynamo, but people like him, and even Trump supporters concede that the president is difficult to love.
3. VIRTUALLY EVERYONE HAS MADE UP THEIR MINDS and many have already voted. We’d be surprised if more than 7 or 8 percent of the public hasn’t made up their minds. The most important demographic group, women voters, has clearly broken to Biden; he has better polling numbers than Clinton among females, young people and African Americans (although Democrats have stumbled with Hispanic voters).
4. THE PANDEMIC CHANGES EVERYTHING: If Trump loses, there’s little question that his dismissive and erratic handling of Covid-19 will be the reason why. There was no comparable issue in 2016 — and Trump’s “super spreader” rallies actually decrease his popularity.
5. THREE CRUCIAL STATES ARE MOVING TOWARD BIDEN: Trump’s victory in 2016 was largely the result of his narrow wins in three key states: Michigan, Pennsylvania and Wisconsin. Polls this week show Trump slipping in all three; Biden’s polling lead in those states is above the margin of error.
A NOTE OF CAUTION: Three’s plenty of time for gaffes and scandals and geopolitical events that could alter the race. The biggest note of caution is that
those three key states are unlikely to report final results on the night of Nov. 3; it could take several days before a winner is declared.
EVEN AS TRUMP SEEMS WELL BELOW a plausible 270 electoral votes, he could have a full week after the election — with no winner declared — to argue that he was sabotaged by fraudulent mail-in ballots. Only a blow-out could avoid a disputed election, and we still don’t see a blowout.
BOTTOM LINE: We could have an early bedtime on Nov. 3 if Florida is declared for Biden by 11 p.m., as senior citizens in the Sunshine State pay him back for Covid-19, which has devastated elderly Americans.
BUT A MORE LIKELY SCENARIO is razor-thin outcomes in states like Florida, Arizona, Ohio and North Carolina, with recounts possible — and Biden not officially winning until all the votes are counted in Wisconsin, Michigan and Pennsylvania. A final result determined by the courts is still not out of the question.
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.
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This post was first published at the AGF Perspectives Blog.
