The National Conventions, the Election Polls, and More Social Unrest

The National Conventions

Over the last week, the news wires of been flooded with coverage from the national conventions. Biden and the Democrats went first, with Trump and the Republicans wrapping things up later today.

The Democrats

From the Democratic convention, a number of key takeaways included:

• President Barak Obama was left with the task of attacking his successor Trump and the Republicans. While Obama talked of the Republicans destroying American democracy, Michelle Obama spoked of Trump being the wrong man for the job.
• Presidential hopeful Biden delivered a better performance than many expected. It will come down to the live debates, however.
• Harris impressed, bringing youth and energy to the convention.
• The Democrats managed to avoid uncovering materially differing in-house views on policy and politics.
• They did talk of climate change, gun violence, immigration, and healthcare, however.

In the 2016 Presidential Election, Trump’s campaign was to “make America great again.”

For Biden and the Democrats, it looks to be “Saving America.”

The Republicans

From the Republican Convention, there was also an attack on the opposition.

Interestingly, the Republicans through Tennessee Senator Blackburn talked of the Democrats wanting to create a Communist state. There was also the talk of law and order… Not the best topic considering the spout of high profile shootings across the U.S.

While there was increased interest in the Republican message, as TV viewings reportedly rose, the Wisconsin shooting couldn’t have come at a worse time…

Following the social unrest in the week, VP Pence is up today to enjoy a rare moment in the spotlight. Trump had given the Vice President the unenviable task of heading up the coronavirus task force. Trump hasn’t thrown his running mate under the bus, however, which has saved Pence’s political career…

So, all-in-all, nothing earth-shattering from the conventions and nothing to really impact the polls before the live debates.

The Latest Polls

According to the latest FT’s interactive Calculator and polling data, we’ve seen very little movement of late.

As at 26^th August, Joe Biden was projected to win 298 Electoral College votes on Election Day, this was unchanged from 20^th August, while down from 308 votes back on 5^th August.

It was much the same for U.S President Trump, whose projected Electoral College vote count held steady at 119.

While unchanged from 20^th August, this was down from 122 votes back on 5^th August.

All in all, this meant that the number of fence-sitters also remained unchanged.

Looking more closely at the numbers, however, the FT Tracker showed Biden taking some success from the Democratic convention.

As at 26^th August, Biden had 203 solid votes, which was up from 190 solid votes on 20^th and 194 solid votes on 5^th August.

By contrast, Trump has seen his solid vote count hold steady at just 80…

Key States

If we look at the key U.S states that tend to be election barometers:

Missouri continued to lean in favor of Trump and the Republicans, with Kansas also leaning in Trump’s favor.

For Biden, Illinois, New Mexico, and Oregon remained solid blues, with Michigan and Pennsylvania leaning in favor of Biden. New Hampshire continued to lean after having been solid in July.

Key states that remain on the fence included Texas, Ohio, and North Carolina.

The Road Ahead

As the Republicans look to wrap up the 2020 national convention, it will now come down to the debates.

For the Democrats, there will be a number of concerns and they may have to tread carefully…

Progress towards a COVID-19 vaccine and effective treatment hit the news wires this week. Both would be a boon for Trump and the Republicans who really had gotten things horribly wrong.

We have seen the NASDAQ and S&P500 reach fresh record highs, defying gravity.

And, we are seeing tensions between the U.S and China ease. Positive updates from both sides on trade and China’s promise of sticking to the phase 1 agreement couldn’t have come at a better time.

The big question is whether Trump has shifted tact too soon. November is still some way off and a lot can go wrong.

Unemployment within the U.S remains at unprecedented levels. While economic indicators have started to flash green, it’s not going to be plane sailing.

Social unrest is evident and the recent shootings will raise concerns over Republican heavy-handedness.

Really, it is remarkable that Trump is not trailing by more. This is more likely to be down to his opponent, however, than any recent Republican successes…

The U.S Dollar

At the time of writing, the U.S Dollar Spot Index was down by 0.13% to 92.885.

Trump will no doubt continue to take credit for the weakness in the Dollar and record-high equity levels.

Placing too much focus on it in August, however, could be a dangerous game. Risks remain tilted to the downside and there’s always the FED to spook the markets.

Powell’s scheduled speech from Jackson Hole will be the main event of the week. For Trump and the Republicans, however, unemployment is going to need to materially fall.

High unemployment and a Presidential Election are a bad combination for law and order. Even more so with Trump riling voters and drawing in the support of gun-wielding nationalists.