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Bob Mason
Trump Effect

President Trump and the U.S Economy

There are just 27-days remaining until the U.S Presidential Election and once more, there has never been a dull moment.

We saw the 1st live U.S Presidential debate deliver risk aversion to the global financial markets. The debate also gave plenty of topics of discussion for the Vice Presidential debate that took place in the early hours of this morning.

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While Trump’s strategy was to attempt to throw Biden off-kilter, Mike Pence appeared to have been given the task to talk. Talk he did and, while he looked to take up most of the allotted time for the debate, the VP also skirted key questions. All of these key questions have come from Trump’s antics over the last 4-years. This should raise concerns over what lies ahead, particularly with the purse strings tightening.

One does have to also wonder how the latest polls don’t give the Biden/Harris ticket a greater lead. The Republicans appear to be attacking Democratic policy rather than delivering concrete policies.

Amidst the worst U.S pandemic in modern times, the U.S President is in court to repeal the Affordable Care Act.

This morning, senator Harris talked of the key issues of Trump’s attempts to repeal the act. A repeal of the act would leave COVID-19 sufferers without medical aid for pre-existing conditions. Another example of a U.S President seemingly at odds with the less fortunate. This came after an unwillingness to condemn white supremacy and more that resulted in the Black Lives Matter movement that lives strong today.

As a non-American and neutral, it was Obama and Biden that brought the U.S out of the global financial crisis. A financial sector fuelled economic meltdown warranted greater oversight. In the boomtown days, governments have greater freedom to loosen the reins.

If Trump and Pence claim credit for the economic recovery and growth in the last 4-years, there is one question to ask…

Why had the FED been on the defensive before there was even a hint of a COVID-19 epidemic?

Few will forget Trump’s tirades over FED monetary policy. Fears of an economic recession driven by a Trump trade war with China the root cause.

While there had been anticipation ahead of the VP debate, there was little market reaction. Harris fared well and Pence delivered Trump’s views on the topics discussed.

Why any voter needs a U.S President aged 74 or 78 is a little peculiar, however. That supports a Biden/Harris ticket, with Senator Harris far more attuned to Joe Public than Pence et al.

VP Pence may be a little lost should he have to take office. Harris appeared far more capable, by contrast.

Trump and COVID-19

Last week, we also had the news of the U.S President becoming infected with COVID-19 and then hospitalized.

Somewhat miraculously, Trump worked during his stay in hospital and, in spite of receiving steroids, returned to the White House just days after admission.

While there’s plenty of speculation over the severity of Trump’s illness, becoming a super spreader cannot be good.

Once more the Republicans have shielded American voters from the truth by delivering conflicting messages.

Even with this, Biden has failed to take advantage. That should then place a lot of emphasis on the next U.S Presidential Debate. If the latest reports are anything to go by, however, Trump refuses to take part in a virtual Presidential debate on 15th October. Trump’s ways may wow loyalists but it is the fence-sitters that he needs to woo between now and Election Day. Making a mockery of the U.S political platform can’t be a good thing, can it?

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The Latest Polls

With less than 30-days to go, Biden will be quietly confident of becoming the oldest American President. Victory would mean that Biden would be 82 years of age at the end of his 1st term…

Voters seem undeterred, however, with Harris providing the needed youth to the ticket.

Based on the latest FT’s interactive Calculator and polling data, Biden has seen his lead hold steady since before the 1st Presidential debate.

The Challenger

The FT Poll Tracker projects Joe Biden to win the U.S Presidential Election with 279 Electoral College votes.

This is unchanged since a rise from 255 projected votes back on 23rd September.

While the latest forecast continues to fall well short of Biden’s highest projections, it does take him through the magic 270 count.

Market concern over the possible political deadlock in the wake of the election lingers, however. VP Pence skirted a question on whether he would ensure an orderly transition in the event of a Democratic victory.

Once more, the issue of postal votes and more were raised. A moot point unless the Republicans choose to leave a large proportion of U.S voters without a democratic voice.

For the markets, however, a projected win of 279 continues to leave the markets in a state of calm.

Perhaps a widening of the gap in Biden’s favor and a return to 300 plus Electoral College votes would spook the markets. Or, we are going to have another chaotic day in the global financial markets on Election Day.

The Polls in Detail

Looking at the breakdown of the votes, however, the picture is still no clearer with less than a month to go…

As at 8th October, the FT projected Biden to hold 190 solid votes and 89 votes leaning in his favor.

While unchanged since before the 1st Presidential debate, Biden’s number of solid votes has fallen from 203, as at 23rd September.

The number of Electoral College votes leaning in Biden’s favour had risen from 52 (23rd September) to 89.

A lack of movement in the polls suggests that fence-sitters are holding out for the remaining debates or an effective COVID-19 vaccine…

Incumbent Trump

For the U.S President, the FT projects a haul of 125 Electoral College votes. This is unchanged since a fall from 143 votes projected as at 23rd September.

While this looks to be bad news optically, Trump has seen his solid vote count rise over the last week.

As at 30th September, his solid vote count stood at 77 before rising to 86 as at 8th October. The rise leaves his leaning votes down from 48 to 39. Not a bad outcome from a debate and a hospital visit…

The Toss-up States

In spite of all the action and chatter, the number of Electoral College votes sitting on the fence remains unchanged.

The projected number of fence-sitters held steady at 134 votes. This was down from 140 votes as at 23rd September, however.

While the leaning and solid vote projections are key, there are just too many Electoral College votes up for grabs for either side to ignore.

As at 8th October, however, even if Trump woos all of the toss-up states, he will still come up sort of 270.

All Biden and Harris need to do are to lock in the leaning votes and they are there. Drawing the odd fence sitter would rub salt in Trump’s wounds, however, and that will be key.

As at 8th October, there are 8 states that are sitting on the fence.

These include Texas (38 E.C votes), Florida (29 E.C votes), Ohio (18 E.C votes), Georgia (16 E.C votes), N. Carolina (15 E.C votes), and Arizona (11 E.C votes).

Looking at other Presidential Election polls to see where the two sides sit in terms of forecasts, it gets interesting.

Reuters/IPSOS is focussed on 6 swing states. These are Wisconsin, Pennsylvania, North Carolina, Michigan, Florida, and Arizona.

According to the latest Reuters/Ipsos poll, Wisconsin, Pennsylvania, and Michigan are heading for Biden.

Sadly for Trump, the rest are on the fence, which is in line with the FT poll tracker.

Arizona, Florida, and North Carolina are up for grabs.

All in all, the polls also support a Biden victory. It’s hardly surprising that Trump is bailing on the next debate.

If past performance is an indication of future performance it would be a disaster…

At the time of writing, the U.S Dollar Spot Index was up by 0.07% to 93.67. We could see a run at 95 and beyond if Trump gets this wrong…

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