Displaying items by tag: election
There has been a major change in the stock market’s attitude toward the president over the last several weeks. For a long time, the market was very concerned with Trump winning. If Trump looked weak in polls, it was bad for markets. According to RBC, for the last 12 months, the S&P 500 has moved mostly in line with Trump’s odds for reelection. According to the bank, ““For the past year, expectations as to whether Trump will win again in November (as tracked by the betting markets) have been moving in sync with S&P 500 performance … But that relationship has broken down a bit in early June, with Trump’s chances (according to the betting markets) falling and the S&P 500 surging”.
FINSUM: Markets care much more about the economy than they do Trump, and everyone seems to be betting that COVID stimulus will keep going even if Trump loses.
New polls emerging show an interesting picture of how the November election may go. While Biden remains about 5 points ahead of Trump in national polls, what is more interesting is that he holds a 5-point lead in three of the most integral swing states—Michigan, Wisconsin, and Pennsylvania. That is critical because those are the states that trump won in 2016 in order to beat Hillary. If he doesn’t win those states this time around, the odds are very long for a Trump victory.
FINSUM: The state of the economy and the long lockdown seem to be weighing on Trump right now, but there is still six months to go, which is more than enough time for a big swing (in either direction).
The “mini Super Tuesday” results are in from yesterday’s six primaries, and Joe Biden has taken an even more commanding lead. The biggest prize he won yesterday was Michigan, giving him a very strong lead heading into next week’s primaries, which includes Florida. He is almost untouchable at the point, but a win in Florida—which is forecasted—would make his advantage insurmountable.
FINSUM: Two thoughts here. Firstly, Sanders is the most successful non-winning candidate ever. He changed the party and galvanized the center, which ultimately led to his losing, but transformed the vision of the party. Secondly, Biden is more dangerous for Trump. He has the right middle-of-the-road policies and demeanor to attract moderates and those whose eyes might be wavering from the president.
Bernie is a long, long way from the White House. He has not even won his party’s bid. Yet, his odds of winning the Democratic ticket, and thus his effect on markets are growing. The reality is that even if you think Trump is likely to win the election, Bernie is probably going to have a big effect on markets this year because of how tight polls are likely to be. With that in mind, here is some advice to protect your portfolio. Analysts are still working through how Bernie might impact specific sectors, but there is one area where all agree he will be devastating—defense. Bernie favors heavy cuts to the defense budget—a position unique to him among the Democratic field of candidates. Therefore, selling defense companies or buying puts on the defense sector seems smart. Such puts are still quite cheap, so not a bad time to prepare.
FINSUM: If Sanders wins the bid he is going to have a stronger impact on markets every week (provided the polls stay close). Best to start thinking about this now as it may be a theme for the rest of the year.
Bernie Sanders’ 2020 bid for the presidency is starting to take on some very familiar patterns. In particular, his campaign is starting to look a lot like his rival Donald Trump’s campaign from 2016. Consider that Bernie is largely a party outsider who has widely been shunned by the Democratic mainstream. On paper his rivals seem more electable, but as they squabble with each other he has built grass roots momentum and taken some of the biggest early election events. Even as he rises, those in his own party worry about his actually winning the bid.
FINSUM: It is eerily familiar. Will it be a similar outcome?