A Waste of Time, Starting Today
Author: Greg Valliere
November 13, 2019
TIME IS A PRECIOUS COMMODITY: We don’t have enough, you don’t have enough. That’s why we design this morning piece to be read in a minute or two.
THE PLOTS AND SUB-PLOTS in the impeachment probe can gobble up hours every day — Rudy Giuliani’s shady associates, the Democrats’ use of selective leaking, Ukraine’s role in the 2016 U.S. election, Hunter Biden’s business ties, etc. It’s too much to follow.
MOST IMPORTANTLY, the outcome of this probe looks pretty clear: there will be a mountain of testimony showing that Donald Trump did something improper, but not enough evidence to persuade Republicans that this constitutes high crimes or misdemeanors, requiring impeachment. Unless there are bombshells lurking, there are nowhere close to enough votes in the Senate to convict.
THIS WILL DRAG ON FOR MONTHS: After hearings lasting until mid-December, the House will vote to impeach, perhaps just before Christmas. A Senate trial could last for two months. The Democrats think this daily drumbeat of impeachment news will soften up Trump for defeat next November; the Republicans think the public will tire of this exercise.
SINCE OUR FOCUS IS ON THE FINANCIAL MARKETS, we think there’s little for investors to worry about; the markets ignored Robert Mueller and they will ignore impeachment. Thus our goal in the next few months will be to focus on other issues which may get lost in the fog. Just this morning there are three major stories for the markets:
THE FED IS HAVING SECOND THOUGHTS ABOUT EASING: We expect Fed Chairman Jerome Powell will make it clear in testimony before Congress today that the central bankers aren’t inclined to cut rates any time soon, surely not in December. Several Fed officials have indicated in recent days that the reduction in October probably wasn’t needed.
A CHINA DEAL STILL ISN’T READY: There’s a truce, sort of, but neither Washington nor Beijing has a final Phase One trade deal ready to sign. We still expect a modest face-saving pact, but Trump’s scathing comments yesterday about China’s “cheating” confirmed the deep antipathy between the two countries.
A NEW TAX BILL IS TAKING SHAPE: As we reported yesterday, Larry Kudlow and his team are working on a major tax cut for next year — perhaps a 15% rate for most of the middle class, the Washington Post reports this morning. Make no mistake, the administration will throw everything but the kitchen sink at the economy next year.
THESE STORIES AND MANY MORE will be important for the markets. But impeachment? Earnings are more important, GDP is more important, interest rates are more important.
OUR ADVICE: Try to filter out the noise, which will be deafening — but is there time to plunge into the mind-numbing Ukrainian narrative? Not unless you have a lot of free time to watch cable TV. Spoiler alert: the Senate will acquit. You want Trump out of office? Vote him out.
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.