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Investor sentiment

Political experts weigh in on the 1st presidential debate

July 02, 2024 - 6 min read

Kari Grant, Vice President of Government Relations at Natixis Investment Managers, chats with government policy expert Charles Myers, Chairman and Founder of Signum Global Advisors, about the first Presidential Debate of 2024 and how both President Joe Biden’s and former President Donald Trump’s television performance could impact the November election. They also discuss down ballot elections, market impacts, campaign strategies and more. 

For additional insight into the debate, Congressional and down ballot elections, and swing state polls, Kari offers her commentary below.


The debate changed everything

June was a busy month in politics – there were many important primaries and highly anticipated Supreme Court cases, but the event that could change everything was last night’s debate. 


What to know about the debate

  • This debate was the earliest in history. The candidates likely thought that holding it so early could help minimize downside risk (in the worst case) or gain momentum (in the best case). The stakes were lower for Trump who is leading in the polls – his goal was to be more disciplined than in 2020, and he succeeded in that. But the stakes were higher for Biden and the news cycle will be dominated by how he failed to meet them. Biden needed to allay concerns about his age and he did not do that. There will now, almost certainly, be questions about whether Biden remains the nominee. Of course, Biden’s political future is in his own hands and he and his campaign may decide that they can change the narrative. This will be something that will be closely watched over the next several weeks.
  • Much of the discussion up until now has been about which candidate could win over the ‘double haters,’ but if dynamics remain the same, the base may be all that matters. These ‘double haters’ may not have been won over by either candidate last night, and they may not show up or vote for someone else but, in that case, the candidate with the strongest base will likely win a second term – in other words, Trump will likely be highly favored.
  • There were few substantive economic policy details on issues like tax and trade. Biden attacked Trump on his proposed 10% tariffs, suggesting they would be inflationary and on the TCJA, which he said had benefited the wealthy. Trump repeatedly hammered Biden on high inflation and suggested that Biden would increase taxes. Both tried to pin rising deficits and the national debt on one another.


Outlook for the balance of power in congress 

  • Republicans remain slightly favored to retake the Senate. They are likely to pick up the West Virigina seat held by the retiring former Democrat, now Independent, Joe Manchin. Republicans only need to flip one of the toss-ups* all held by Democrats – Jon Tester (D-MT), Sherrod Brown (D-OH) and Jacky Rosen (D-NV). However, as of now, these incumbent Democrats all maintain a lead in polling. It is possible that the Senate is a 50-50 split with control presided over by the VP of whoever wins the White House.  
  • It’s too early to predict who will control the House. Both Republicans and Democrats face 11  ‘toss-up’ races. Given these dynamics, it is practically guaranteed that no matter what side takes the House doesn’t have a big majority.
  • There were a few interesting developments in June primaries that present a mixed picture of whether moderates or more ideological candidates have the support of voters on both sides of the aisle. In Virginia, sitting Republican Representative and Freedom Caucus member Bob Good is currently trailing his opponent, John McGuire, in the vote tally by less than 1%. Given how close the race is, he is eligible for, and has called for, a recount. Good’s opposition was supported by both former Speaker Kevin McCarthy (R-CA), whom Good helped to unseat from his leadership position, and former President Trump. In New York, ‘squad’ member Jamaal Bowman (D-NY), who has been an outspoken critic of Israel’s approach to the war with Hamas, was defeated in his primary by George Latimer. And in Utah, current Rep. John Curtis won the Republican party’s nomination to replace Sen. Mitt Romney, beating Trent Staggs, whose political ideology is more right of center, and who also had former President Trump’s backing. These primaries, while interesting, may not prove a trend in the electorate as, in the same month, another member of the squad, Rep. Alexandria Ocasio-Cortez (D-NY), and another member of the Freedom Caucus, Rep. Lauren Boebert (R-CO), won their primary nominations. 

*The competitiveness classification in this email comes from the Cook Political Report. Cook ranks the competitiveness of races based on a variety of factors, and has a good track record of predicting seats that are in the ‘lean’ ‘likely’ categories closer to election day. This should not be viewed as predictive, but as helpful guide on which races may be worth monitoring.* 

Fast election facts 

  • According to the RealClearPolitics average of national polls, Trump leads Biden in 5 out of the (possibly) 7 swing states. In terms of momentum, in the ‘head-to-head’ poll format, both candidates are in nearly the same position as they were at the end of May with few minor changes: Trump edged up slightly in Arizona, North Carolina and Pennsylvania, and Biden improved slightly in Georgia and Nevada.  **A reminder that polls are not predictive** 

As of June 26 (so not reflecting any feedback on the Debate), the RealClearPolitics average in swing states was as follows:

Arizona: Trump + 6 – a two-point change in Trump’s favor since May 30 
Georgia: Trump + 4 – a one-point change in Biden’s favor since May 30
Michigan: tie 
Nevada: Trump + 4 – a one-point change in Biden’s favor since May 30
North Carolina: Trump + 6 – a one-point change in Trump’s favor since May 30 
Pennsylvania: Trump + 3 – a one-point change in Trump’s favor since May 30
Wisconsin: tie 

  • Prominent pollster Nate Silver released his forecast for the White House. His model gives former President Trump a 66% chance to win but doesn’t rule out the possibility of Biden winning. As a prominent statistician, Silver’s predictions are always big news, but, like anyone in the predictions/modeling business, he has a mixed track record. 
  • Both candidates and their parties raised millions in May, continuing to lay the groundwork for the most expensive election of all time (anticipated to cost over $10B). Of note, Trump raised millions more than Biden in May, potentially eliminating the cash advantage Biden has had all season. Trump’s campaign and the Republican National Committee raised $141M in May, compared to $85M raised by Biden and the Democratic National Committee. 

Upcoming political events to watch related to the US election  

  • Any day up until, and during, the Republican National Convention (RNC): Trump will announce his running mate
  • July 11: Scheduled sentencing date for former President Trump on NY conviction
  • July 15 – 18: RNC in Milwaukee
  • July 24: Prime Minister Netanyahu of Israel to Address a Joint Session of Congress 
  • August 19 – 21: DNC in Chicago 

Bonus: Can’t get enough politics by following the US election? 

  • June 30 – July 7: France to hold legislative elections 
  • July 4: The UK will hold parliamentary elections 

This material is provided for informational purposes only and should not be construed as investment advice. The views and opinions contained herein reflect the subjective judgments and assumptions of the authors only and do not necessarily reflect the views of Natixis Investment Managers, or any of its affiliates. The views and opinions expressed are as of June 28, 2024 and may change based on market and other conditions. There can be no assurance that developments will transpire as forecasted, and actual results may vary.

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