JT TAYLOR: Capital Brief

06/16/16 07:30AM EDT
JT TAYLOR:  Capital Brief - JT   Potomac banner 2
''You know nothing for sure...except the fact that you know nothing for sure.''

— JFK

TRUMP’S TRIPLE THREAT: It’s been exactly one year since Donald Trump announced his candidacy for president and through many highs and more lows than anyone ever expected, he finds himself on the ropes again. Seven out of ten Americans give Trump unfavorable marks beating out Hillary Clinton’s high negatives by a healthy margin - and Clinton is now up 8-12 points over Trump in the general election. Negative views of Trump are rising among a number of groups, jumping by double digits among liberals and conservatives, and among both Republican women and Democratic men. Even Republican leadership is scratching their heads and dodging questions regarding the presumptive nominee as the Republican party image faces historic lows. Trump faces major challenges on three fronts: Clinton and the Dems, the media, and his fellow Republicans. He now has one month left to win over the Republicans and stanch the bleeding as the threat of a three-headed monster will be too difficult to overcome this fall.

SLOW BERN: In the beginning, few believed Bernie Sanders was a serious challenger to Clinton, but when the dust settled, Sanders won 23 primaries and more than 12 million votes, all while energizing progressives with calls for a political uprising. Sanders, who has spent most of his political career on the sidelines, is now a major symbol and is expected to play a feature role at July’s convention. He’s vowed to help Clinton defeat Trump and shepherd his supporters her way - but don’t forget to read the terms and conditions. Sanders will take his time before endorsing while aggressively pushing his leftist policy agenda to Clinton, party leaders and convention power brokers.

CLINTON’S COMFORT ZONE: Despite her success, Clinton ran a rather uneven primary failing to understand and then extinguish the Sanders threat from the onset. Her victory speech after CA marked a turning point and now, on top of an multi-million dollar advertising assault, robust voter turnout, and her prudent response to the tragedy in Orlando, Clinton is becoming more comfortable with her message and her measured attacks on Trump. She’s engaging the people and opening up more on the trail - but still needs to inject much-needed confidence back into party, win over Independents and doubtful voters.

NO LEAVE FOR UNIONS: After months of speculation, union leaders across America are voicing confidence that their groups will stay blue in this year’s election. Trump has labeled himself  a labor-loving Republican, courting unions aggressively with tirades against trade agreements and immigration – two things that sit well with blue-collar voters – but has never fully connected. Though some union leaders have reservations about Clinton, they just don’t see the groundswell toward Trump. There’s no way to predict what individual union members will decide in the privacy of the voting booth, but local leaders often hold the key to their groups’ interests and they’re pointed right at Clinton.

BREXIT: A week remains until the June 23rd “Brexit” referendum with recent polls shifting towards the “Leave” camp. However, we maintain our view that the Remain camp will ultimately prevail. See: research note and expert call with Alex Nicoll. We believe the downside economic risks (even if exaggerated by the party line) combined with a hefty percentage of undecided voters (that we suspect will marginally sway towards a Remain tally) will push the vote to Remain. In the last days, the Remain camp has loudly re-engaged the conversation for a special “Brexit budget” aimed at filling a £30bn hole in public finances by increasing the basic rate of income tax from 20% to 22%, with top earners’ share rising by 3pp to 43%. More fear-mongering? Maybe… but we don’t suspect the island nation to vote Brexit.

ELECTION PREVIEW WITH SCOTT REED: With the fight for the White House heating up, we’ll talk with Scott Reed, one of Washington’s top political strategists, to gather his views on who will be the next President of the United States, the upcoming party conventions, and the highly competitive Senate and House races this fall. The call will take place next Tuesday, June 21st at 11:00 AM EDT. You can find the dial-in information here.

HUNTED: THE F-35 PROGRAM AT FARNBOROUGH: On Friday, June 17th at 11:00 EDT, our Senior Defense Policy Advisor LtGen Emo Gardner will host a call for investors regarding the first ever appearance of the F-35 at the world’s most important aerospace show, the Farnborough International Airshow, July 11-17.

© 2024 Hedgeye Risk Management, LLC. The information contained herein is the property of Hedgeye, which reserves all rights thereto. Redistribution of any part of this information is prohibited without the express written consent of Hedgeye. Hedgeye is not responsible for any errors in or omissions to this information, or for any consequences that may result from the use of this information.