After the Celebration — A Hangover
Author: Greg Valliere
November 9, 2020
THE CELEBRATIONS this past weekend are over, and now comes the hangover — as Joe Biden faces everything from election challenges to the Georgia Senate runoffs to the raging coronavirus.
THE IMMEDIATE CHALLENGE FOR BIDEN is a legal challenge to his election, which will dominate the news tonight. We’ve looked at all of the cases, and most seem frivolous and unlikely to affect the election’s outcome — but charges of fraud will persist among Donald Trump’s supporters; he won over 70 million voters, many of whom think the election was stolen.
AT SOME POINT, PERHAPS BY THANKSGIVING, Trump will abandon his legal challenge; his close associates and most Republicans will urge him to throw in the towel. But there’s a 10% chance, maybe even a 20% chance, that Trump could win a court challenge or two, and he will not go easily.
THE MASSIVE TRUMP ARMY will remain convinced that there was election fraud; they will seek to delegitimate Biden’s victory, and this could complicate the new president’s ability to win legislative victories. The biggest unknown, as usual, is Mitch McConnell, who reportedly is willing to deal with Biden.
IN THE MEANTIME, Biden’s advisers have a huge “to-do” list. First is Covid-19, which is out of control in much of America and the world. Biden will unveil a Covid task force as early as today; a nationwide lockdown this winter is very unlikely, but tougher social distancing and mask rules are likely after Biden’s inauguration.
BEFORE THAT, there will be major issues to address, starting with the need to pass a continuing budget resolution, keeping the government open. The current CR expires on Dec. 11. It’s likely that still another CR will be required, lasting until just before Christmas, as usual.
ANOTHER PRESSING ISSUE is the stalled pandemic stimulus bill. Biden insiders leaked to the press this weekend that he may get involved in talks between Nancy Pelosi and Treasury Secretary Mnuchin. Once again, McConnell will be a key player; he’s unlikely to support much more than a $1 trillion bill.
THREE OTHER BIG ISSUES FOR BIDEN: He needs to assemble a Cabinet. First comes a chief of staff, probably his long-time ally Ronald Klain. Cabinet appointments will be vetted soon, with many of his picks announced by late December. McConnell again will play a major role; he probably will have the votes to block nominees like Elizabeth Warren at Treasury or Bernie Sanders at Labor.
SECOND, BIDEN WILL IMMEDIATELY PROPOSE regulatory changes, un-doing many of the Trump initiatives. The big focus will be on the environment — curbs on oil and gas drilling on federal land, tougher auto emissions regs, curbs on pipelines, etc. The U.S. will rejoin the Paris climate talks.
THIRD, THE JAN. 5 GEORGIA RUNOFFS: A staggering amount of money will be poured into these two races; the Democrats need to win both elections to control the Senate in a 50-50 tie, an uphill battle. Biden faces a choice — does he get heavily involved and risk a defeat just as his administration begins?
BOTTOM LINE: Before focusing too intensely on the Biden Administration, there has to be certainty that he won. We think most courts — including the Supreme Court — will reject charges of fraud. Biden can’t wait until that’s certain, he has a huge list of issues to pursue — starting with the virus, which dominates everything else.
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 Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. 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.