Does Donald Trump Really Want a Second Term?
Author: Greg Valliere
July 6, 2020
THE RUMOR MILL IS IN OVERDRIVE: Starting about 10 days ago, a rumor flew through Washington that President Trump might not seek a second term. This claim hit a crescendo just before the July 4 weekend — until two events, which we cite below, cooled the speculation.
THE RUMOR is that Trump is not excited about serving four more years, is tired of crises like protests and the pandemic, would rather spend more time at Mar-a-Lago, and sees from polls that he may be headed for a re-election defeat.
WE’VE HEARD ALL THE SPECULATION that Trump could drop out just before the GOP’s Aug. 24-27 convention, with Mike Pence becoming the nominee, perhaps running with former United Nations Ambassador Nikki Haley.
WE’RE SKEPTICAL: Trump sure looked like a candidate this weekend, and he still has a chance of winning. The Real Clear Politics aggregate of all polls shows Joe Biden ahead by 8.7 points, a narrowing from Trump’s mid-June deficit, and Trump still has a plausible path to 270 electoral votes.
MORE IMPORTANTLY, TWO EVENTS MAY BE TURNING IN TRUMP’S FAVOR:
1. The economy. Last Thursday’s blockbuster jobs report may have over-stated the economic snap-back, and the new Covid-19 breakout may keep a majority of Americans at home, weakening third quarter GDP growth.
But financial markets are roaring, with U.S. stock futures sharply higher this morning — and you can be sure that Trump and his aides see the economy as a plus, boosted by still another stimulus package in early August.
2. The crime wave. Trump’s harangues on desecrating Civil War statues seems to have limited appeal outside of his base, but even moderates must be uneasy as gun violence spikes in U.S. cities.
Dozens were shot and killed this past weekend in Chicago, New York, Atlanta, Washington,etc. as big city crime seemingly spins out of control. Trump has an issue — proposals to defund the police could make urban America an even more dangerous place. Biden opposes defunding the police, but Trump will lump all the Democrats together.
WE STILL THINK TRUMP is the underdog, but there will be a reversion back to normal political patterns by this fall. Giddy Democrats thought two weeks ago that Trump could lose Flordia, Ohio, North Carolina, Georgia, Texas, etc. — but that’s still a long-shot. Even Pennsylvania is hardly a shoo-in for native son Biden.
SO WHY WOULD TRUMP ABDICATE? Anything’s possible in this unprecedented year, but we put chances of Trump dropping out at no more than 15-20% — not zero, but very unlikely. We’ll throw in two caveats: let’s see how his polls look in mid-August; if they’re terrible he might have second thoughts about running. Second, we assume his health and energy are still good.
THE KEY FOR INVESTORS: If Trump (or Pence, for that matter) make this a close race, with an intense attack on Biden’s mental acuity and left-leaning agenda, that would affect the Senate races. A blowout Biden win would sweep the Senate back to the Democrats; a close presidential race would increase chances that the GOP could keep the Senate, maintaining market-friendly divided government.
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.
©2021 AGF Management Limited. All rights reserved.