The 2020 presidential election is still about a year and half away, yet a large number of investors have already made changes to their portfolios based on potential outcomes. Some 40% of investors say they have adjusted their portfolios because of the upcoming election, according to a recent survey. The reality is that investors are worried about a Democratic sweep of the presidency, House, and Senate, which could mean a serious rollback of Trump-era policies, including tax cuts. “If Biden continues to poll this well into the beginning of next year ahead of the primaries, he is gonna start to have some negative effect on the market”, says Tony Roth of Wilmington Trust.
FINSUM: We can’t help but agree with that last assessment. That said, we think negative effects will be slow and steady, not sharp moves.
The Democrats may have won the House, but they are at a definitive crossroads. While the Republicans currently have a well-defined brand and agenda, the Democrats found themselves largely without a leader and without a clear agenda (other than being anti-Trump). That means they will have some big decisions to make in the near term as they try to mount a push for the presidency in 2020. There appear to be two major policy decisions the party is considering. The first is whether pursuing a fruitless impeachment against Donald Trump would be worthwhile, and the second, and frankly more intriguing question, is whether they will adopt a “Medicare for all” platform.
FINSUM: So much hangs in the balance right now. The Democrats have let themselves be overshadowed by the Republican party and will need to find their ideological and policy footing ahead of the next election. We expect the party’s agenda will move further left in order to serve as a mobilizing foil for its base.
Ever since FDR, presidents’ first 100 days have been closely followed by investors to see how markets react. The results of looking at the market’s behaviour in the first 100 days of a presidency has somewhat surprising results. Reagan and Clinton, who are both seen as pro-business had weak starts, while Obama, who is largely considered unfriendly to business, saw a great response. Overall, the piece makes the point that the economic conditions the president inherits are at least as important as the president himself.
FINSUM: If the last statement is true, then we think Trump is in great shape, as the current condition of the economy is solid (going jobs growth, inflation rising, wages moving higher).
Source: Wall Street Journal
Bloomberg has just conducted an interesting national poll aiming to see where Americans stand on numerous issues relating to Donald Trump. One of the key areas of the poll was looking at how Americans feel about Trump’s potential conflicts of interest. While two-thirds of those in the US say that he needs to choose between being a businessman or president, 69% believe it is going too far to make him selloff his businesses before taking office. 51% of those surveyed said they believed he would put the nation’s best interests ahead of his own family’s finances when dealing with foreign leaders. Trump has said he is going to cut ties with his businesses, and has scheduled a December 15th conference to explain how he will do it.
FINSUM: The media has been making a very large guffaw about Trump’s conflicts of interests, but this survey shows a more sophisticated picture of how Americans feel.
After much consternation in the media and general public about Trump’s possible conflicts of interest as president, he has announced that he will fully remove himself from his business in order to make sure he does not have any conflicts of interest as commander-in-chief. Early this morning, Donald Trump tweeted that he would be leaving his business “in total in order to fully focus on running the country”. The message was part of a series of tweets, and Trump also announced that “Legal documents are being crafted which take me completely out of business operations. The Presidency is a far more important task!”. He continued, saying “I feel it is visually important, as President, to in no way have a conflict of interest with my various businesses”.
FINSUM: It will be very interesting to see what arrangements he makes in order to ensure he does not have any conflicts of interest. Even if he is out of the operations, if he retains ownership he will still be accused of having vested interests.
Source: Wall Street Journal