Polling Points, Stress Tests & Tech Issues
Trump's only consistent message is that he will not or cannot afford to leave the negotiating table with China. Trump reiterated today that the phase-one trade deal with China was “fully intact” after his adviser Peter Navarro caused panic for 5-7 minutes earlier this week when his remarks were misinterpreted that the Trade deal was off. This means that technology stocks could be the first to gain from a confirmed resumption in talks.
Stimulus replaces lockdown
Another positive emerges from reports of discussions between the Trump administration and Congress about another stimulus package. Ashraf mentioned that the administration's willingness to resist any lockdown despite record cases could be offset with delivering a new stimulus package in July. These would be considered a double-positive shock for the economy. Or at least an attempt to do so.
The market has plenty to focus on at the moment and the US election isn't until November 3 but there are some themes worth watching. There is a clear shift towards Biden in a series of polls, with some major ones showing a lead as wide as 14 points with some showing him losing in Republican strongholds. No one needs a reminder of the polling surprises in recent years so pricing in policies is premature.The risk here is the polls themselves. Trump is highly attuned to polls and the near-term risk is that he grows desperate. It's unclear how that would manifest itself but ramping up the trade war against China, or some kind of military action can't be ruled out as a tail risk.
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