Could Republicans Lose the Senate This Fall? Plus, Some Seriously Good News on a Vaccine
Author: Greg Valliere
April 28, 2020
PRESIDENT TRUMP’S PLUNGING POLLS have prompted near-panic among Republicans, who worry that their control of the Senate is in jeopardy this fall. That would be a very big deal, because the Senate is the firewall — blocking activist legislation that will come from the House, which the Democrats almost certainly will retain.
OUR REVIEW OF THE SENATE RACES indicates that the Democrats have a plausible path but far from a certain path. The math is simple — the Democrats need to pick up four shaky GOP seats while losing only one of their seats, for a net gain of three. That would transform the 53-47 Republican margin to 50-50, a tie that would be broken in favor of Democrats if Joe Biden wins the presidency.
THE KEY RACES: We start with the premise that Doug Jones, a Democrat, will lose his seat in Alabama. That would give the GOP a 54-46 majority, which means the Democrats would have to win the following four states: Colorado, where GOP incumbent Cory Gardner is in serious trouble; Arizona, where incumbent Martha McSalley clearly trails; North Carolina, where Sen. Thom Tillis is essentially tied; and Maine, where Susan Collins trails slightly.
TWO OF THOSE STATES SHOULD BE EASY PICKINGS for the Democrats: the GOP is likely to lose in Colorado, and probably in Arizona as well. But the other two races are too close to call — North Carolina could support Trump again (he won the state by 3.7% in 2016), and Collins is a four-term Senator who leans to the center (although her vote for Brett Kavanaugh has hurt her in Maine).
THE WAVE FACTOR: Just five truly vulnerable incumbents? That’s unusually low, which raises the possibility that an election tidal wave could make a huge difference. In light of Trump’s bizarre comments on ingesting disinfectants — and the disastrous small business loan program — Trump could lose convincingly, which would jeopardize a few more GOP Senate seats, including one in Georgia.
CONVERSELY, BIDEN COULD FLAME OUT and the Democrats might only pick up a seat or two. The former vice president has had a bad week, and it’s only Tuesday.
ALLEGATIONS OF SEXUAL ASSAULT 27 years ago continue to percolate, with friends of the accuser confirming she was deeply shaken about an alleged incident with Biden. And the Bernie Sanders wing, hardly locked up by Biden, reacted bitterly yesterday when New York cancelled its primary; his supporters want to amass delegates who could challenge the party platform.
BOTTOM LINE: We’ll tweak our odds from a 60-40 chance that the Republicans retain the Senate to 55-45 that they keep the Senate. Everything would have to go exactly right for the Democrats; they would have to gain four seats while losing one in Alabama — and Biden would have to win the presidency to break a tie. It’s not out of the question, and the markets will have to watch carefully; this has major investment implications.
* * * * *
SOME SERIOUSLY GOOD NEWS ON A VACCINE: Check out the article in this morning’s New York Times on the Jenner Institute at Oxford University, which is “sprinting fastest” to develop a coronovirus vaccine, according to the Times.
TESTS ON MONKEYS have been very encouraging, with human trials set to begin soon. The article says scientists at Oxford believe that if the vaccine proves to be effective, they could have the first few million vaccines available by this September.
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.
