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Four Quick Themes as We Await Mueller

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Four Quick Themes as We Await Mueller

Author: Greg Valliere

July 24, 2019

WASHINGTON IS GRIPPED WITH MUELLER FEVER this morning, even though today’s hearings probably won’t change much. As we await Robert Mueller’s testimony, here are four themes worth watching:

1. THE SPENDING PIG-OUT: The push-back is intense from The Wall Street Journal, House conservatives and other deficit hawks, who are horrified by the budget deal, which abandoned any pretense of fiscal discipline and gave Nancy Pelosi huge domestic spending increases, even more than hikes won by the Pentagon. Despite the extremely vocal criticism, this deal should pass narrowly in the House later this week and easily in the Senate next week.

2. EVERYONE HATES BIG TECH except, of course, investors who have made billions of dollars betting on one of the most successful industries in American history. But the industry has potent enemies: Donald Trump, who sees a conspiracy to thwart him and his allies, and Democrats like Elizabeth Warren who see too much concentration and privacy abuses. The industry faces prolonged headline risk, but meaningful penalties from antitrust agencies are years away — and in the meantime campaign contributions from Silicon Valley will soar.

3. ANGRY BASE THREATENS TO OUST DEMOCRATS: Just as the Republican base has ousted GOP lawmakers who haven’t been conservative enough, here come left wing activists, threatening primary challenges against Democrats who aren’t aggressive enough against Trump. This trend started last year, when Alexandria Ocasio Cortez stunned veteran Democrat Joe Crowley, and now the list of potential targets includes some big names: Reps. Jerrold Nadler, Richard Neal, Eliot Engel, William Clay, and Massachusetts Sen. Ed Markey all face primary challenges.

MOST OF THESE INCUMBENTS have raised plenty of money and won’t be caught off-guard, like Crowley. But the message is clear in liberal states: Democrats who appear too soft on Trump need to watch their backs; the left wants to oust the Old Guard.

4. A SHIFT IN THINKING ON IRAN: The isolationist Trump has an aversion to military action; he prefers to rely on bombast, threatening action that never seems to come. But we’re hearing that John Bolton and other hawks have convinced Trump that Iranian provocations in the Strait of Hormuz have to be confronted.

THE PENTAGON HAS IDENTIFIED military targets in southern Iran, and U.S. air strikes are increasingly likely if the Iranians continue to target shipping in the region. Trump blinked a month ago, but it’s unlikely that he will blink again. A joint attack by the U.S. and the U.K. would send a signal that Trump and Boris Johnson are on the same page when it comes to confronting the ayatollahs.


The views expressed in this blog are those of the author and do not necessarily represent the opinions of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies.

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.

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Written by

Greg Valliere

Greg Valliere

Chief U.S. Policy Strategist

AGF Investments

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