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The Story of the Summer

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Insights and Market Perspectives

The Story of the Summer

Author: Greg Valliere

June 13, 2023

WE’VE BEEN OFF FOR A FEW DAYS, with one eye on several huge stories: the Trump indictment, signs of a shift at the Federal Reserve, and bitter in-fighting among House Republicans. These developments pale, in our opinion, in comparison to signs that the Ukraine war has come to Moscow.

REPORTS IN THE WASHINGTON POST and elsewhere describe bitter in-fighting among Russian field generals, military strategists in Moscow, and the Russian elite in neighborhoods that have been targeted by drone attacks. These audacious strikes have not been entirely from Ukrainian troops that are targeting western Russia; some of the attacks have come from anti-Putin forces now operating within Russia itself.

IT’S TOO EARLY TO MAKE A DEFINITIVE CALL on the Ukrainian counter-offensive, which has reclaimed key villages in the east. Several sophisticated Ukrainian tanks, supplied by the West, have been destroyed or damaged. But Ukrainian troops, their morale strong, continue to advance.

THE MAJOR CHANGE is the political climate in Moscow, as the country’s elite openly question Vladimir Putin’s ability to protect the country. The Post reported this weekend that one of the most influential members of the Russian parliament, Konstantin Zatulin, declared openly that all of Putin’s war goals have failed.

THE LIKELIHOOD OF HUGE CASUALTIES this summer could be the last straw for the Russian public; Putin already has lost most of the oligarchs and generals, and the Russian economy continues to deteriorate. It’s becoming clear that Russia cannot win this war, as strategists in Kyiv and western capitals discuss potential terms of a truce that could arrive by the end of the summer.
* * * * *
DONALD TRUMP’S INDICTMENT TODAY is likely to be a media circus, followed by a fiery speech by the ex-President this evening from his New Jersey golf club. But not much will change — Trump should maintain his comfortable lead among Republicans for the GOP presidential nomination, even as Chris Christie, Nikki Haley and others condemn him.

WE TALKED WITH A SAVVY REPUBLICAN yesterday who is aghast that top secret documents were haphazardly scattered throughout Mar-a-Lago; like former Attorney General Bill Barr, our source believes the government has a very strong case. And two more Trump indictments loom — in Georgia for vote tampering and in Washington DC for his role in the Jan. 6 riot.

BUT THE FURIOUS REPUBLICAN BASE IS CONVINCED that there’s a double standard; they believe Joe and Hunter Biden have committed crimes. The continued likelihood that Trump will win the nomination is a nightmare for many of the party’s moderates, who believe he would lose in the general election.

BUT WHAT IF TRUMP, EVEN IF UNDER INDICTMENT, WINS the general election against the elderly Biden? The buzz in Washington is that if Trump manages to win, his first act as president would be to self-pardon.
* * * * *
MORE BUDGET TURMOIL: Sadly, the debt ceiling deal earlier this spring has not eliminated the likelihood of more chaos on government spending. A handful of very conservative House members are demanding that House Speaker Kevin McCarthy push for even deeper cuts, and McCarthy seemed to agree yesterday. This is a very complicated story; suffice to say, a government shutdown is possible as the new fiscal year begins on Oct. 1.
* * * * *
THE BIG MARKET STORY OBVIOUSLY is the Federal Reserve’s consideration of a pause later this week in its rate hikes. This morning’s inflation data will be crucial. Is a rate cut possible later this year? Unlikely but not impossible, as the Fed worries that the commercial real estate Depression could have a major impact on banks.


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.

For further information, please visit AGF.com.

©2023 AGF Management Limited. All rights reserved.

Written by

Greg Valliere

Greg Valliere

Chief U.S. Policy Strategist

AGF Investments

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