Washington DC Wisdom: 5 Catalysts Between Now & Election Day

By Kayla Campos on October 21, 2020

We are in the sprint phase of the 2020 election season and time is winding down for the Presidential candidates along with the many races in the Senate and House of Representatives. More people are voting earlier than ever before; an estimated 27.9 million votes have been sent in via the mail-in ballot through October 18, compared to approximately 5.9 million at the same point in 2016.¹

Fiscal Stimulus

We believe stimulus is coming and it is just a matter of when, not if.² Getting a package done at this point of the election cycle can impact sentiment but is unlikely to impact pre-election economic growth. Transfer payments take time to distribute to consumers and make their way back into the economy. Getting a deal done is a win for the consumer and the equity market. The point is, we simply cannot have 11 million people unemployed in this country, small-medium businesses closing daily and several pockets of the economy hurting – travel, leisure, hospitality – even as there are other parts of the economy that are doing quite well in manufacturing, housing and auto. It truly is and has been, an uneven economic recovery but our politicians need to move to ensure those that are struggling can get help.

Final Presidential Debate

The last of two Presidential debates is set to take place Thursday night at 9 pm ET in Nashville, TN. Following last week’s town halls by each candidate, it appears Trump needs more substance on how to continue the momentum in the economic recovery and COVID response while Biden needs to inspire confidence and more information on the tax plans.

COVID-19 Hospitalizations

We are watching the COVID trends, particularly in the Midwest as there are important swing states in Michigan and Wisconsin. Below we feature hospitalizations from The COVID Tracking Project of the four major regions of the US.³

Third Quarter’s GDP Report

Third Quarter’s GDP numbers are preliminary released on October 29th. The number will read well – 30+% Q/Q A.R from significant declines in the 2Q.⁴ The normalized rate is more likely 4-5% but that is solid momentum – and could likely increase if the Blue Wave consensus at this point takes hold and further stimulus comes in to more than offset the tax increases proposed so far. Needless to say, the jury is still out.

Another October Surprise

With less than two weeks to go, a lot can change but often times things do not. We cannot put to rest the idea of another “October surprise”, especially in today’s faster, 24/7 news cycle. Since 1972, national polling averages shifted by an average of 1.8 points in the final 15 days of the Presidential election cycle.⁵ However, that swing proved to be critical in 2016.

Please reach out to us if you have any questions or comments.

Todd Lyon, CIMA®, CWS®, AIF®

Lyon Wealth Management
tlyon@hightoweradvisors.com
https://lyon.hightoweradvisors.com/