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.
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