JT TAYLOR: Capital Brief

06/07/16 07:38AM EDT

JT TAYLOR:  Capital Brief - JT   Potomac banner 2

HILLARY THE HISTORIC: Hillary Clinton has secured enough delegates to claim the Democratic presidential nomination and is poised to become the first female candidate to lead a major party to the White House in U.S. history.  A handful of super delegates pushed Clinton over the finish line of 2,383 ahead of a jampacked day full of primaries. Clinton will call for the  Democrats to unify behind her candidacy as primary season comes to an end today – and she and party leaders expect Bernie Sanders to follow suit. To pad her lead, look for her to pick up a sizeable chunk of delegates in the six states voting today; her campaign hopes that being declared the presumptive nominee 24 hours before CA votes doesn’t suppress turnout and handing a victory to Sanders.

BERNIE’S CALIFORNIA DREAM: Now that Clinton has been declared the presumptive Democratic nominee, this leaves Sanders with a hard decision to make – accept it or fight until the death. Sure, a win in CA would help him pitch his future to superdelegates - but to what end? Sanders’ case is broken - Clinton won a majority of the states, pledged delegates and super delegates - not to mention tens of  thousands of more votes. We think that despite Sanders’ reputation for obstinance, he’ll turn the corner once he realizes the only thing he can do between now and the convention in late July is hobble Clinton and her ability to get a head start on outmaneuvering Donald Trump, not to mention damage the party’s increasing chances at making gains in Congress.

No matter what happens in today’s primary, with Democrats adding 2.3 million voters to their ranks in the past four months, CA has become increasingly blue and will be an insurmountable challenge for Trump come November.

THE OTHER REPUBLICAN AGENDA: Speaker Ryan will release the first installment of a six point Republican agenda – “A Better Way” – presenting different types of conservative policies the Republican party will implement if they take the White House. To make it work - Republicans need a compromise with Donald Trump. Disagreements between establishment Republicans and Trump continue to flare and so far establishment Republicans have taken a back seat – but with a plan in place – look for their voices to trump the party’s standard-bearer.

GARY’S GAINS: Libertarian presidential nominee Gary Johnson may not have solidified a serious position in the election race yet, but he’s sure on his way – he’s currently polling at 10 percent and gaining ground. Senator Ben Sasse (NE) – who was long considered as a potential third-party nominee – may be hopping on team Johnson. While Trump continues to double down on his hijinks and as Johnson begins to pick up big endorsements and earns media coverage - he’ll climb in the polls – something he needs to happen to be included in the general election debates.

FRENCH FRIED: David French stepped out of the limelight almost as fast as he came into it. Bill Kristol’s choice for an independent third party challenger confirmed he will withdraw his name from consideration for president. No surprise here as the third-party position has been filled by Johnson, the Libertarian.

FICKLE FED: Fed head Janet Yellen expressed concern about the jobs market, while reiterating that the Fed is data dependent - stocks popped on the news. In the past six months, the Fed pivoted from Hawkish (in December) to Dovish (March/April) to Hawkish (May). Market consensus now perceives Yellen and the Fed as flipping back to Dovish in June. Yellen’s favorite economic indicator (the “Labor Market Conditions Index”) just hit a 7-year low. U.S. #GrowthSlowing. So, what’s an investor to do? The Fed is perpetuating volatility in macro markets, so stick with what’s worked all year, Long Bonds (TLT). For the record, our most vocal call has been TLT – it’s up around 9% YTD versus 3% for the S&P 500.

NEUSTAR: NATIONAL SECURITY POLITICAL FIGHT: Our Telecommunications-Media Policy Analyst Paul Glenchur gave us his insight on Neustar’s continued fight to retain the lucrative local number portability contract “Neustar: National Security Political Fight

BREXIT: SHOULD I STAY OR SHOULD I GO?: Join us for a call this Wednesday with Alexander Nicoll, a consulting member of the UK-based International Institute for Strategic Studies, as he discusses the events leading up to the UK vote and what the outcome of the vote spells for the UK and EU. Please email us for dial-in information



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