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.
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