One of Louis-Vincent Gave’s go-to lines is that money managers are not paid to forecast, but to adapt.
In his latest note to investors, he points out that this is especially true when it comes to political events.
With this in mind, the events of the past few weeks - Joe Biden’s shockingly poor debate performance, followed by Saturday’s attempted assassination of Donald Trump - all but guarantee a strong Republican performance in November’s US elections.
Of course, 16 weeks is an absolute eon in politics, and lots of things can happen between now and November. But if the 2018 stabbing of Brazil’s Jair Bolsonaro taught us anything, it is that assassination attempts swing undecided voters towards the victim in large numbers. Moreover, in the US more than any other democracy, fundraising matters. After Trump’s May 31 conviction in a New York court, donations to his campaign poured in.
Following Saturday’s assassination attempt, it is likely the Trump campaign’s coffers will again be overflowing. This will be all the more so, since the assassination attempt will make it a lot less socially awkward to support Trump. In 2016, few people openly endorsed Trump. This time around, high-profile business leaders such as Elon Musk and Bill Ackman have openly pledged their support. And the man on the street is also no longer shy of showing his allegiance. Going to mass in Grand Lake, Oklahoma this Sunday morning, it felt as if everyone was wearing a Trump shirt or MAGA hat (although admittedly, this was a self-selecting group in a very red state).
Meanwhile, given the infighting in the Democratic Party and uncertainty about Joe Biden’s ability to withstand a grueling four-month campaign, donations on the left are drying up. And with Hollywood stars rapidly dropping off the bandwagon, supporting Biden has clearly lost its cachet.
The prevailing mood has changed, and the stage seems set for a sizable red wave come November’s vote.
