US Elections: Economic recovery key to re-election of President Trump

The state of the economy, particularly employment, is historically the most telling condition for a president’s reelection and, therefore, is key for President Trump. Markets have not begun to price the November election and will not do so until the fall, according to FXStreet’s analyst Joseph Trevisani.

Key quotes

“Markets are likely to remain election agnostic until the Fall. The reason is quite simple. Polls this far from November 3 have little predictive value. Short of a change in candidates what happens between now and Labor Day is the preliminary for the main event.”  

“Mr. Biden will be presented as a moderate but it will be difficult to discount the many alternate and far more radical voices from the party.  All of the cities that have seen riots have been under Democratic control for many years, a fact that may not be lost on the electorate and that the Trump campaign is sure to use.”

“For July and August, the economic recovery and the progress of the pandemic will be the central focus for the markets. The faster and more secure economic growth the better the chances for President Trump in November.”  

“If the economy does continue to improve the coinciding gains in equities and the dollar should not be considered a reflection of President Trump’s rising odds but the normal interplay between markets and Main Street.”