Displaying items by tag: Trump
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.
Those who lean right might not want to consider it, but polls have been showing Biden and the Democrats leading (poll issues being a major issue, but ceteris paribus….). That said, investors have a duty to consider what would happen in the event of a Biden win, or a Democratic sweep. While Democratic wins in the House and presidency are quite plausible at this point, a win in the Senate still looks like a challenge. Let’s consider two scenarios then: a Biden win with a split Congress, and a Democratic sweep. In the first scenario, markets do not worry a whole lot. The Republicans holding onto the Senate would mean many of the left’s more radical proposals would be blocked. What about a Democratic sweep? That could be different, as Democrats could push through anything they wanted. However, even that scenario is looking less dire for investors because Biden is not moving to the left as much as feared. Also, since his priority will be to reopen the economy, sharp increases in taxes seem unlikely in the near term.
FINSUM: It still seems unlikely that Democrats could sweep given the Republican’s 53-47 lead in the Senate. So if Biden wins and the Democrats keep the House, it would probably be an okay (no big moves) scenario for investors.
Despite some minor discontent, generally speaking the broker-dealer industry has been very tolerant of the new Reg BI. However, those who have been working on compliance and counting their blessings that DOL Rule 1.0 didn’t come into full force could be in for a rude awakening. Many will be aware that Joe Biden is well ahead in national polls at the moment. Polling difficulties aside (of which there are many), the growing risk for the industry is that Biden wins and then quickly moves to cancel Reg BI and install a much stricter rule akin to the first iteration of the DOL Rule. If he were to win the White House and take Congress, he would have wide latitude to undue the current regulatory paradigm. Even without a Congressional win, he would very likely reappoint all the heads of key departments, like the SEC and DOL, which could have a strong effect.
FINSUM: Just as the industry was settling into what looked like it might be a permanent new regulatory environment, things could very messy again. If Trump wins, none of this happens, but given polls it is an increasingly likely possibility.
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.
It has been long in the works. So long, in fact, that many seem to have forgotten about it. Yet here it is—a new fiduciary rule from the DOL, almost three years after the last one was vacated. The new version of the rule has just been delivered to the White House for review by the Office of Management and Budget. This starts a multi-month process that may lead to its implementation, but given how late the rule is arriving it may not get enacted before Trump could potentially leave office. If Trump wins the election, the timing is irrelevant, but if he loses and the rule has been in place less than 60 days when the new president takes over, it can very easily be reversed.
FINSUM: We have not yet seen a good summary of the contents of this rule, but will be covering it as soon as possible. The only thing we have heard is that the new rule is “is primarily a prohibited transaction exemption intended to replace the Best Interest Contract Exemption”.