AGF Management : Donald Trump Gets to Change the Subject; Five Key Take-aways on the Supreme Court Impact

Insights and Market Perspectives

Author: Greg Valliere

September 21, 2020

CHANGING THE SUBJECT: Donald Trump's terrible polls on his handling of the pandemic had made him the underdog in the election - unless there was a way to change the subject. Sure enough, the nation will now debate abortion, Obamacare, and the Supreme Court.

TRUMP IS STILL THE UNDERDOG, because the extraordinary legacy of Ruth Bader Ginsburg has energized female voters and produced a $100 fundraising windfall in the past 48 hours.

BUT EVERYTHING NOW SEEMS SCRAMBLED, from the stalled Covid aid bill to health care, as a potentially disputed election looms in just six weeks. Here are five key take-aways:

1. REPUBLICANS AREN'T GUARANTEED of getting enough support for a floor vote on Ginsburg's replacement. Mitch McConnell immediately lost Susan Collins and Lisa Murkowski, as expected, but there will have to be two more defectors, a tall order. Maybe Mitt Romney or Corey Gardner could bolt, but we doubt the latter. A long-shot is Sen. Chuck Grassley, who despises Trump, in private.

2. THE LEGISLATIVE OUTLOOK IS CHAOTIC: Democrats are furious at what they see as hypocrisy - McConnell wouldn't even meet with Merrick Garland eight months before an election. So it's possible that Democrats may retaliate by grinding the Senate to a halt, jeopardizing a pandemic aid bill. Even a government shut-down on Oct.1 can't be ruled out.

3. A NOMINATION BY FRIDAY: Trump may not even wait until the Ginsburg funeral - a nominee will be announced within days, with two clear front-runners: Amy Coney Barrett and Barbara Lagoa; the latter might help win Hispanic votes for Trump in Florida, but Barrett is the clear favorite among anti-abortion activists; she once argued that even if a fetus is shown to have Down Syndrome, she would oppose termination of the pregnancy.

4. JOE BIDEN, SUBDUED: As Democrats in Washington expressed outrage over McConnell, the Democrats' nominee reacted almost passively on Friday night, and yesterday he urged both sides to 'de-escalate.' And Biden's camp sent a message to progressives to refrain from urging filibuster reforms or packing the Supreme Court. 'Sleepy Joe' is a devastatingly accurate Trump nickname for the Democrats' nominee.

5. ELECTION IMPACT: Until last Friday night, only about 10% of the electorate hadn't made up its mind. But turnout and enthusiasm are a huge variable, and our take is that women - especially women under the age of 40 - are now far more motivated to vote. The Trump base already was locked in; now it's possible that lukewarm Biden supporters will vote, largely out of concern over Roe v Wade and the upcoming Supreme Court ruling on Obamacare.

BOTTOM LINE: Odds favor Trump and McConnell getting their Supreme Court pick, probably before the election; let's call it a 60-40 likelihood. But it may be a pyrrhic victory, because the likely election outcome - a narrow Biden victory and a GOP loss of the Senate - looks more plausible this morning than it did last week.

The views expressed in this blog are those of the author and do not necessarily represent the opinions of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies.

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