China Trade Deal Looking Less Likely; The Pete Buttigieg Craze
Author: Greg Valliere
November 20, 2019
WON’T GET FOOLED AGAIN: How many times have we heard that there was an “agreement in principle” between the U.S. and China on trade — only to have the talks subsequently bog down over the details? With enormous fanfare, the White House announced on Oct. 11 that a deal was done, in principle, but it’s not
done. We agree with this morning’s piece in the Wall Street Journal — the talks are stalled.
NEITHER SIDE CAN AGREE on lifting existing tariffs, and as a result even more tariffs loom on Dec. 15 — and yesterday President Trump warned that tariffs could go even higher if there’s no trade progress soon.
LOWERING OUR EXPECTATIONS: The most we anticipate is a vague agreement for China to make more agricultural purchases in exchange for no new tariffs; the heavy lifting will be left for “Phase Two” talks that could drag on for another year or longer on difficult issues like China’s subsidization of state-owned firms, and potential penalties for intellectual property theft.
THE WORST CASE SCENARIO is that even a modest Phase One deal will fail, with the Chinese deciding to take a risk, waiting to see who wins the U.S. presidential election next November. This much appears sure: no one will get fooled again if the president or Larry Kudlow proclaim that an “agreement in principle” is imminent. The devil will be in the details.
* * * * *
THE DEMOCRATS HAVE STILL ANOTHER FRONTRUNNER: Iowa and New Hampshire, two of the whitest and oldest states in the nation, continue to have a disproportionate influence on American politics, as the primary season rewards retail politicians who — literally — try to meet every potential voter at least once. Not surprisingly, there’s a new frontrunner.
THE EARNEST AND ARTICULATE PETE BUTTIGIEG now leads in those two states. Voters are concerned about Joe Biden’s age (he turns 77 today) and his son’s cronyism. They think Elizabeth Warren’s proposals are too radical. They like Bernie Sanders’ authenticity but don’t see him as a plausible president. So it was inevitable that a fresh face would emerge — not the Wall Street billionaire Michael Bloomberg, 77, but the affable 37-year-old gay war veteran, Buttigieg.
IS BIDEN IN TROUBLE? Yes, but he’s still the shaky frontrunner nationwide. We continue to believe Democrats will conclude that he has the best chance of beating Trump. But Biden needs to do well in tonight’s debate — very well — against Warren and Sanders, targeting their health care policies.
BIDEN STILL HAS A GOOD CHANCE OF BREAKING OUT in South Carolina on Feb. 29, but before that he gets there, he needs to finish in the top three in Iowa and New Hampshire, and it’s possible he won’t.
MEANWHILE, DOES ANYONE REALLY THINK a Buttigieg-Trump race will focus on serious policy issues? Buttigieg’s personal life will generate a frenzy of tweets on far right. Sorry for being politically incorrect this morning, but this needs to be said: Is America ready for a gay president? The jury is still out on that. Hell, we’re not even sure America is ready for a female president.
SO HATS OFF TO MAYOR PETE for coming this far; he’s a joy to listen to. It will get tougher for him from here because the frontrunner always becomes the target — and there’s time for still another Iowa frontrunner to emerge in January. Everyone in the race knows Barack Obama surged at the last moment in 2008; Buttigieg may be peaking too early.
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), Highstreet Asset Management Inc. (Highstreet), 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 and Highstreet are registered as 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.
© 2019 AGF Management Limited. All rights reserved.