The Race is Tightening
October 19, 2020
FOUR YEARS AGO TODAY, Hillary Clinton led in Michigan by 12 points and was ahead by 7 points in Pennsylvania and Wisconsin. She lost all three. Joe Biden’s lead today is actually less than Clinton’s in Pennsylvania and Michigan — a signal that as this Thursday’s debate approaches, Donald Trump still has a chance.
OF ALL THE BAROMOTERS WE LOOK AT, the RealClearPolitics aggregate of Las Vegas betting odds is the most interesting right now. Biden had a roughly 66% chance of winning just two weeks ago; that figure was 59.6% this morning.
RECOVERED FROM COVID-19, Trump is barnstorming across the country with an energy level that far eclipses Biden’s. Trump is drawing huge crowds, egged on by his outrageous charges about Michigan Gov. Gretchen Whitmer, Dr. Anthony Fauci and of course Biden, whose lead in Ohio has evaporated and is now down to only 4.4% in Pennsylvania.
THE MEDIA AND WASHINGTON’S POLITICAL ELITES still expect Biden to win; several Republicans have distanced themselves from Trump, which only makes his base more motivated to vote for him. But his base isn’t enough; Trump needs wider support, which makes the upcoming debate his last shot at getting to a tie in states like Pennsylvania.
DESPITE ALL THE COMMENTARY about how this looks like 2016, it really isn’t that similar. Biden has a huge cash advantage; Clinton did not. Biden has astonishing popularity among women and seniors; Clinton did not. And Covid-19, not even on the radar screen in 2016, continues to be Trump’s single greatest albatross.
WE’VE PROCLAIMED SINCE OCT. 2 that Biden would win, narrowly, and that still seems like the base case (a landslide never seemed likely). Yet this predictable
narrowing has two big impacts: a close race could allow the GOP to keep the Senate, maybe by one seat; and the threat of a disputed election still looms.
BOTTOM LINE: Thursday’s debate is huge, and Trump almost certainly will improve on his disastrous performance in the first debate. The key issue: Will he have the discipline to hammer away at Biden’s tax hiking agenda? Or will he focus on personal grievances?
BIDEN WILL GO INTO THE DEBATE as the favorite, looking to run out the clock, not always the best position. What a difference two months makes: the Democrats were complacent and cocky in August — and suddenly they’re nervous as Pennsylvania tightens, just as it did four years ago.
* * * * *
THE STIMULUS HYPE WON’T END: Seemingly every day there’s another breathless account of one final meeting between Nancy Pelosi and Steve Mnuchin; they will speak today and the new deadline apparently is tomorrow. Actually, both sides are close to agreement, egged on by Trump, who’s willing to sign off on a bill that spends more than Pelosi’s $2.2 trillion target.
BUT THIS OBVIOUSLY OMITS Mitch McConnell and congressional Republicans from the equation. They adamantly oppose spending more than $1 trillion and some GOP lawmakers don’t want to spend anything. McConnell will hold a show vote this week, pledging to spend $500 billion, and the Democrats will scoff. We can’t see a deal with these divisions.
A STIMULUS PACKAGE EVENTUALLY will pass, possibly in a lame duck session but more likely after the Jan. 20 inauguration. Millions of Americans will be left in limbo for weeks longer; they’re mere pawns in Washington’s political gamesmanship.
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.
©2022 AGF Management Limited. All rights reserved.