Displaying items by tag: democrats
The reality of the political situation in the US is that markets and the media are betting that Biden is going to win the presidency. Many also think the Democrats have a fair shot at sweeping Congress and the presidency. If either eventuality happens, especially the latter, tax hikes look likely. Biden formally announced his plan to do so recently. Therefore, a rise in corporation tax and a hike in the top tax bracket back to Obama-era levels seems highly probable.
FINSUM: The tax hikes that seem most likely will create a host of considerations for high earners. For instance, a reversion to previous tax levels would change the utility of certain pass-through entities versus other types of businesses.
On Friday we ran an article covering which sectors and stocks would do well if the Republicans swept the election. Today we are doing the opposite side of that coin—the stocks that will win big if the Democrats sweep. Democrats are currently leading in the presidential poll and seem likely to keep ahold of the House, while the Senate looks like much more of a stretch. That said, if a sweep happens, infrastructure may be a key sector to surge as a large infrastructure bill would seem likely. Other sectors likely to gain are renewable energy, semiconductors, consumer staples, and oddly, gun stocks (since sales will likely surge on fears of regulation).
FINSUM: The infrastructure play seems like a good one, semiconductors also (like Western Digital). We still think a more likely scenario is a split Congress.
No matter which side of the aisle you are on, the last several weeks have not been great for the president’s reelection chances. While there are certainly a large portion of “silent” Trump supporters who will vote for him in November, the trends in the polls are not looking good. In particular, Trump seems to be losing ground in what is emerging as the biggest battleground of all—Florida. In 13 of the last 14 elections, the candidate who won Florida won the election. Based on how other key states are heading—Michigan, Ohio, Pennsylvania, Wisconsin—it seems like Trump must win Florida to take the election. One Republican strategist in Florida said the trends in the state were not good, concluding that “Obviously the triple whammy of the virus, the pandemic-induced weak economy and the social unrest have taken a toll on President Trump’s poll numbers”.
FINSUM: Trump has strong support in much of the Latino community, which should help him. But his polls numbers for the state’s key 65+ population have been weak, seemingly as a result of the virus, which is working against him.
Democrats are pushing for more time with the new DOL rule. The party says that the 30-day comment period on the new DOL rule is insufficient for public comment. They argue that since the new rule is 123 pages itself and relies on thorough knowledge of the SEC’s 770-page Reg BI, 30 days is simply not enough time to fully digest and comment on the rule. In their words, “As the Obama Administration twice respected the requests of those who asked that the fiduciary rule comment periods be extended, we call on this Administration to do the same. At a minimum, we request the DOL provide an additional 60 days so as to give the public a more appropriate amount of time to consider the impact of such a significant proposal and better align this comment period with past precedents.”
FINSUM: Two industry perspectives here. On the one hand, going slow is not necessarily bad—who wants new regulations sooner? On the other, getting the rule done before Trump may leave office would be more beneficial to the industry than a new version that a new Democratic administration might propose.
Twitter took a very big step in its ongoing confrontation with President Trump this week. Over the last couple of years, the social media site has taken some steps to block Trump tweets that were barred under its policies. However, yesterday it took what feels like a monumental step—it started putting warning signs and links on posts that it said contained misleading information. Trump has exploded in his response, saying he could shut down social media companies.
FINSUM: We are of two minds about this. On the one hand Twitter was founded as an alternative source of news and a way for people to express their opinions outside the filter that mainstream news provides. On the other hand, it does not seem right that various social media platforms are being used as unchecked fake-news propaganda machines by both parties.