Editor's Note: Below is a brief excerpt from today's Early Look written by Hedgeye Director of Research Daryl Jones. Click here to get a free month of the Early Look.
It took only eight short days after his inauguration for Trump to dip below 50% in the approval ratings based on Gallup’s polls. Currently his approval ratings based on the Real Clear Politics average sits at the lowest of his Presidency. According to this aggregate, only 37.7% approve of the job Trump is doing and 57.2% disapprove of the job he is doing.
The latest odds from Ladbrokes have Trump’s impeachment or resignation odds at 11/10 (48%) before finishing his first term. The same bookmakers have the odds of Trump serving a full term at 8/11, or 58%. Given that it would take a majority in the House and two-thirds majority in the Senate to impeach Trump, and both Houses are Republican controlled, these odds makers are truly assuming the worst.
The economy and stock market are telling a very different tale. To cite a few examples:
- Median home prices are up 6.5% year-over-year in June;
- U.S. unemployment is at 4.3%, a 16-year low, and the economy has added 1 million jobs since Trump took office;
- Business and consumer lending is up; and
- Last but not least, the stock market is on an absolute tear. Anyone who bet negatively on stocks because of Trump has been taken out behind the woodshed this year.
Now certainly, there are negatives related to the economy, but it’s hard to dispute that there are many, many more positives at the moment. Are these because of Trump or despite Trump? That is a difficult question to answer. But with a Trump resignation or impeachment getting closer to being priced into the market, the next big political catalyst may be when that cloud is removed...
