Trending
GRIDLOCK IS GOOD: Neither the right nor the left will dominate Congress for the next two years, as Republicans head toward control of the House by a small majority — and as Democrats have a shot of maintaining control of the Senate in a 50-50 tie, perhaps depending on a Dec. 6 runoff in Georgia.
ACTIVIST LEGISLATION from the White House or the Senate will die in the House; investors won’t have to worry about tax law changes or huge new spending. In the Senate, it’s possible that liberal judges will win confirmation, reflecting public opposition to harsh abortion curbs, but filibuster rules will prevail, thwarting Joe Biden’s agenda.
MOST ANALYSTS, INCLUDING US, GOT IT WRONG: There was no Republican Red Wave, as voters in state after state rejected candidates who claimed the 2020 election was rigged. Mainstream Democrats in states like New Hampshire won by painting their GOP opponents as too radical.
OUR INITIAL TAKE is that while Democrats exceeded expectations, they have to grasp some lessons: the country doesn’t want massive new spending, fossil fuels are necessary, crime and the porous border have to be addressed, etc. For the Republicans, the lesson is clear — Donald Trump hurt the party in several races and may become a noisy distraction by winter.
A TRANSFORMATIVE ELECTION: Biden’s influence is waning; many Democrats won despite him, not because of him. And Trump endorsed polarizing and inexperienced candidates. A new crop of politicians will emerge as voters seek fresh faces; a major winner last night was Florida Gov. Ron DeSantis, who’s clearly ascendant. The Democrats’ new stars may be Michigan Gov. Gretchen Whitmer and Maryland Gov.-elect Wes Moore.
WE’RE IN AN ERA OF ENDLESS CAMPAIGNS: The next one will begin in a week as Trump announces his candidacy. This will fascinate the Washington chattering class, but for the markets, the focus will shift to whether a recession looms, whether the Fed will end its tightening this winter, and whether a truce and negotiations are possible in the Ukraine war.
A VICTORY FOR THE COUNTRY: For us, there was one huge takeaway from the election: there were no widespread voting irregularities — a few snags but nothing to further inflame the country’s deep divisions. Anxiety over social unrest may subside; elections are messy but for last night at least, the system worked.
Related: Support for Ukraine is Slipping; Epic Trump-DeSantis Battle Has Begun
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.
The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.
AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.