Displaying items by tag: democrats
Bank of America Merrill Lynch has just published a new survey of institutional money managers and found an interesting sentiment among those managing a hulking mass of American money. That finding is that money managers are much more worried about the election than they are about the trade war. Institutional investors think election worries will have a much greater effect on markets than the trade war will. The chief US economist at Goldman Sachs summarizes the situation this way, saying “While there are no obvious signs of election-related effects on economic activity so far in this election cycle, there is some concern that . . . uncertainty could have a more noticeable effect on sentiment and activity as the election approaches”.
FINSUM: We absolutely agree. The trade war seems to be cooling as both sides appear as though they want to hash out the issues. The election is an event with potentially hugely variant outcomes and it is highly difficult to predict. This all means it is hard to price, and that uncertainty can weigh on companies and markets.
Conservatives and investors, consider yourselves notified: Bernie Sanders could very well be the next president. Bernie is jumping in the Democratic race and now looks like the frontrunner after what looked like a failing campaign just a few months ago. Bloomberg is draining votes from Biden, which is helping Bernie. He is looking very good in the first three big contests of the Democratic primary, and it looks more likely than not that he will win the bid. He had a huge fundraising round in Q4, leading the democratic field. What made his dominance in fundraising so impressive was not just the size relative to the crowded race, but the fact that his average donation was only $20, showing the scale and intensity of his support.
FINSUM: We still think Bernie would falter against Trump in the main race, but his odds for getting the bid are improving.
The election may still be ten months away, but the whole year is likely to be framed by it, markets being no exception. With that in mind, Morgan Stanley has some advice for investors. The first thought they offer is that in this case, being reactive is probably better than being proactive. If you reflect on 2016, everyone thought that a Trump victory would hurt stocks. The exact opposite happened. In this case, don’t assume a Democrat victory would be bad. Accordingly, it may be wise to wait until the election and then allocate as seems fit at that time. The other thing to bear in mind is that a Democratic sweep could be surprisingly good for stocks. According to Morgan Stanley, ““We would expect that a Democratic sweep in 2020 could deliver the greatest impulse to the economy” because of its greater odds of bringing a fiscal stimulus than when the government is divided between parties.
FINSUM: We really like this line of reasoning from MS.
This week the House voted to impeach president Trump. But in a little known technicality, he is not formally impeached until the House speaker hands over the impeachment to the Senate to hold its trial. House speaker Pelosi is dragging her feet on doing so in an effort to get the Senate to run the kind of trial the Democrats think is fair. In response, Trump himself is demanding an immediate trial, with Senate leader McConnell mocking the Democrats for their previous urgency on impeachment coupled with their stalling strategy now.
FINSUM: Whether you are on the right or the left, the delay by Pelosi does not look good as it is a contradiction of the previous urgency.
While it never really seemed to be in doubt, it is all but certain now that Democrats are going to bring articles of impeachment against President Trump. The party is likely to bring two separate articles against Trump by today, with an additional one possible. One will be focused on abuse of power, and the other one or two on obstructing Congress and obstruction of justice. In response to Republican criticism that the Democrats are rushing the impeachment process, Jerrold Nadler said “I want to be absolutely clear: the integrity of our next election is at stake. Nothing could be more urgent”.
FINSUM: No surprises here, but this will likely all be for nothing because of the Senate.