“Freedom is hammered out on the anvil of discussion, dissent, and debate.”
-Hubert Humphrey
Going into last night’s brouhaha, the polls basically had the Presidential race at a statistical tie. In fact, at one point yesterday in fivethirtyeight.com’s now-cast simulator, which projects as if the election were held today, Trump was ahead of Clinton. At the moment in that same simulator, Clinton’s probability of winning sits at 52.1 and Trump’s is at 47.9. How will last night’s debate alter the race?
How will last night’s debate alter the race?
No doubt, Hillary Clinton and Donald Trump dropped the gloves last night. The debate was much less about a discussion of policy, but rather personal attack after personal attack. As it relates to strictly grading the debate, it’s hard not to give Clinton the win as she was prepared, coherent, and largely stayed on point. As for The Donald, well, he was The Donald.
The immediate reaction from the equity and currency markets last night certainly supports the idea of a Clinton victory. In particular, the Mexican peso is up over 1.75% as of this writing. Suffice to say, you don’t want to be long the Peso if Trump renegotiates NAFTA and builds “that wall” (even if it is under budget!).
Broadly speaking, the majority of Washington insiders also believe that Clinton won the debate. A panel by Politico indicated that 79% of insiders believe she won. In the same panel, more than 57% of Republican insiders also scored the debate a victory for Clinton.
So both the political and financial elite believe Clinton, but what about the voters? As of yet, we haven’t had any opinion polls, but there have been a number of online polls that give the edge to Trump. In an online CNBC poll of 700,000 votes, Trump was voted the winner 65% to 35%. Additionally, in an online poll by Time of some 1.3 million votes, Trump was scored the winner at 52%.
As polls roll out in coming days, we will see who the voters believe won the debate and whether it will move the needle, but Democratic consultant Chris Kofinis might have put it best in this morning’s Wall Street Journal when he said:
“After 90 minutes, they did an incredibly effective job of moving no voters.”
But the bottom line is that if you believe Clinton won the debate then she should gain in polls in the comings days. If she doesn’t, Trump is going to be very hard to beat.
Back to the Global Macro Grind…
Even as the polls in aggregate give Clinton a slight edge, this race remains a coin toss as the undecided voters are, well, remaining very undecided versus other elections. We provide a few examples of this below:
- In the CNN poll of exactly four years ago, Obama was at 50, Romney was at 47 and a mere 3% of voters were undecided.
- In the Washington Post poll of four years ago, Obama was 49, Romney was at 47 and 4% of voters remained undecided.
In this election, depending on which polls you look it, the undecided segment of the electorate is still about double that of four years ago. To the extent this undecided segment holds heading into election day, polls will be a lot less reliable than many expect . . . maybe not dissimilar to Brexit polling?
Our Managing Director from Washington JT Taylor will be hosting a dinner in New York tonight with Scott Reed who is the Chief Political Strategist of the U.S. Chamber of Commerce, an organization that will spend more than $25 million this election cycle. We are expecting an engaging and thoughtful discussion of the debate and the next 41 days of the campaign. Please email if you would like to join the discussion tonight (note: space is limited).
With all the talk of politics this morning, we’ll end on another topic from Washington, the fact that we are less than 90 hours from a government shutdown. As JT wrote this morning in the Capital Brief:
“We now find ourselves less than 90 hours away from a government shutdown, and ultimately, the path forward is still unclear. The Senate will take a procedural vote later today, but the blame game is still being played on both sides of the aisle - and Capitol Hill Republicans need six votes from their Democrat colleagues to ensure a bill gets passed, but relief for Flint rests atop the heart of the divide, and Democrats are demanding the funds to help improve the water infrastructure in the MI city to ensure clean water is available for all citizens. Neither side plans to blink just yet, but neither want to risk the blame for a shutdown - especially in an election year.”
It seems likely that both parties will come together in an election year. We are talking about Congress though, so who knows for sure. As David Brinkley once said:
“Washington, D.C. is a city filled with people who believe they are important.”
Ain’t that the truth.
Our immediate-term Global Macro Risk Ranges are now:
UST 10yr Yield 1.55-1.63%
SPX 2117-2159
VIX 12.02-18.78
USD 94.80-96.25
Oil (WTI) 42.60-46.51
Gold 1
Keep your head up and stick on the ice,
Daryl G. Jones
Director of Research
