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Trump Still Trails Biden; U.S.-Russia Oil Talks Set

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Insights and Market Perspectives

Trump Still Trails Biden; U.S.-Russia Oil Talks Set

Author: Greg Valliere

March 31, 2020

LET’S LOOK AT POLITICS THIS MORNING, a diversion from the crisis. It appears to us that while President Trump’s job approval rating has risen a bit, he still trails Joe Biden in the November election — a surprise, since Trump been on TV nearly two hours a day while Biden is confined to his basement TV studio.

THE BIG POLITICAL BUZZ has been the surge of support for Andrew Cuomo and Gavin Newsom, but we think it’s unlikely that either governor would retreat from the front lines and run in 2020. Both are likely candidates in 2024; we assume if Biden, 77, wins this fall, he would be a one-term president.

A POLLING IRONY: Trump rages at the polltakers employed by Fox News, and sure enough — of all the polls we’ve seen recently, Fox gives Biden his biggest lead, 9 percentage points over Trump. And the Rasmussen poll, which Trump frequently touts, has Trump’s approval at 45%, with his disapproval at 54%, worse than other polltakers have reported recently.

GIVEN THE EXTREME VOLATILITY NOW, the polling numbers will bounce
around, so we rely on the Real Clear Politics average of all polls, which has Biden
at 51.0 and Trump at 44.5 this morning.

EVEN WITH THOSE NUMBERS, we make Trump the slight favorite, in part because Biden’s lead undoubtedly is inflated by huge margins in California and New York. As we learned from 2016, Hillary Clinton’s 3 million vote margin also was inflated by those states.

WE ALSO MAKE TRUMP THE NARROW FAVORITE because in times of crisis, an incumbent enjoys a polling bump. Another key factor is voter enthusiasm, which isn’t impressive for Biden, who will be pummeled relentlessly by Trump this fall.

BUT THIS PRESIDENT could’t get past a 50% job approval rating, even when the economy was strong, and that’s a warning signal for Trump. At the end of the day, it all comes down to the Electoral College, where Biden has a plausible path; watch Michigan, Pennsylvania, Wisconsin and Arizona; the latter, with 11 votes, could swing to Biden.
* * * * *
AN END OF THE OIL PLUNGE would be good news for the markets, and there’s a glimmer of hope as Trump and Vladimir Putin agreed yesterday to begin talks on cutting production. But this is a complicated narrative, unlikely to produce major production cutbacks, our sources say.

OIL PRICES BELOW $20 A BARREL ARE A DISASTER for the U.S., Russia, Canada and even Saudi Arabia, although the latter can produce a barrel for about $8. With demand likely to stay anemic for the next couple of months, could the countries come to some sort of agreement? First, Russia demands a relaxation of U.S. economic sanctions, which seems unlikely.

THE VILLAIN IN THE OIL IMPASSE is Saudi Arabia, which seemingly wants to
crush producers in Russia and the U.S. Could Trump win a major production cutback from Riyadh? He might demand it, but a significant reduction is unlikely.

THE BEST THE U.S. INDUSTRY CAN EXPECT is a U.S. decision to fill the Strategic Petroleum Reserve, plus emergency aid to the industry in the next stimulus measure. The previous bill omitted either of those options, to the industry’s dismay; the next bill will look more like a traditional “Christmas tree,” and U.S. producers could catch a break.

BOTTOM LINE: A modest deal between the U.S., Russia and perhaps even the Saudis could reduce output by a bit, because Trump would take any kind of victory, and he has some cards to play. But this is a demand crisis that will not be alleviated by modest production cuts.


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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