The macroeconomic patchwork hardly has the potential to define the major asset price movements for now but rather the facts of the U.S. political battle come be at the forefront this week. The presidential race is coming up to its final lap, just about a month before the crucial voting day on November 3. The Democratic nominee Joe Biden who was also the former vice president alongside Barack Obama - and the sitting president of the United States Donald Trump are going to meet onstage in Cleveland for the first debate of the general election.
The event will run on September 29, from 9 to 10:30 pm Eastern American time, which means late overnight Tuesday into Wednesday in Europe, and two more rounds of presidential debates and a vice-presidential debate will follow on October 15 and 22, respectively, in Miami and Nashville, Tennessee.
Biden has a steady polling lead, which stands in early September at 7.5 points in the FiveThirtyEight national polling average. But polls are not necessarily predictive of the election’s final result as many of us could remember from the previous U.S. election in 2016. And it certainly doesn't matter who would be "officially" recognised as the winner of the debate by CNN or NBC TV channels, although it is easy to propose in advance that they would give preference to their favourite Democratic claimant.
It is not known whether such a result is going to disappoint or mobilise the traditional electorate of Biden's rival, Donald Trump, while some of Biden's supporters may relax and miss the voting procedure as they may feel that the fate of the elections has already been cast. Actually, the main outcome of the debate could be the conclusions that the teams of both candidates will draw for themselves, and the most important conclusion for the markets would be the willingness of the parties to compromise on the size and structure of the stalled coronavirus stimulus package.
The motivation of both Republican and Democratic politicians at this stage should lie in a desire to save face before their faithful voters, because neither of the two parties probably want to have the image of a killer of the deal that affects the well-being of millions of ordinary workers, the unemployed persons, and private business owners in the United States.
Based upon the nervousness and volatility of price fluctuations in stocks, currencies, and gold, the market's majority is still doubtful about reaching a deal, but the end of the New York trading session on Friday was dominated by moderate growth in all the three major indexes including the S&P500, the Nasdaq and the Dow Jones industrial average indexes. Also the fact that the majority of funds and private traders chose to approach the weekend with open positions, rather than with closed positions, as they were likely more afraid to sit off the "beaten track" could lead investors to new highs of the year soon. Probably they were not afraid of uncertainty as much as they feared the necessity for crowds to run towards cash.
The end of the previous week still points to the belief that at least a relative majority of the market concluded that a relief bill could be agreed upon before the election date. Well, the degree of their adaptability or flexibility in the negotiation process depends on their impression and reaction to different electorate groups at the political show in Cleveland.
Rival groups led by Steve Mnuchin and Nancy Pelosi are still trying to talk by phone once again in order to sit down at the negotiating table. Tension between Republicans and Democrats is rising after President Trump announced his nomination to appoint Amy Coney Barrett as the new judge of the U.S. Supreme court during a flag-decorated ceremony in the White House Rose garden - with Mrs Barrett’s, 48, own presence along with her seven children.
The Republican majority in the Senate is going to approve the candidate before elections to replace a liberal icon Ruth Ginsburg, who died at the age of 87. The Senate judiciary Committee's confirmation hearing will begin on October 12, Trump said, and then Barrett will push her conservative majority to a commanding 6-3 ratio of voices. This may play a crucial role in repealing the Obamacare affordable care act immediately after the election, and also, most importantly, may help the court to make a controversial decision if a recount is deemed to be necessary. This may be in Trump's favour if the votes are almost even and if the Democrats insist on their victory, while Trump would presumably not agree to recognise it.
Barrett is a devout Roman Catholic, so she is a favourite of religious conservatives, a key bloc of Trump voters. It seems that Trump has preferred to please his supporters throughout the whole country rather than to attract just some new potential Cuba-origin supporters in Florida, as some proposed that Trump nominate a Cuba-origin woman from that resort state. So, Donald Trump probably decided to strengthen the strong side, rather than seek happiness in the support of other smaller groups.
Trump called Barrett an “outstanding scientist” who would defend their “God-given rights and freedoms." "She should have run for President," he said, comparing her performance to that of Joe Biden’s. The prospect of concentrating an absolute power for the Republicans has angered their rivals so deeply that they are already attacking not just Mrs Barrett as a lawyer but also as a mother. Barrett is the mother of seven children, including Vivian and John Peter, adopted from Haiti. Some are questioning whether two children, adopted by Amy Coney Barrett, were legitimately adopted.
“Some adoptions from Haiti were legit. Many were sketchy as hell,” wrote a Democratic activist and former Capitol Hill staffer, Dana Houle, in a since-deleted tweet on Friday. “Would it matter if her kids were scooped up by ultra-religious Americans, or … when there was family in Haiti?” Another left-wing activist, John Lee Brougher of the NextGen America PAC, was writing to add a fuel to the fire and even wrote: “As an adoptee, I need to know more about the circumstances of how Amy Coney Barrett came to adopt her children, and the treatment of them since.” Brougher’s tweet was also later removed. “Disgusting. The left now smearing Amy Coney Barrett for adopting children. It was the most predictable thing in the world that Democrats would attack Amy Coney Barrett’s children,” Tom Cotton, Senator from Arkansas, responded to defend Mrs Barrett.
“Vivian is our miracle,” she told the Senate Judiciary Committee in a 2017 hearing, explaining that the girl was so ill when she was adopted at 14 months that doctors doubted she would ever walk or speak. “Today Vivian is a track star, and I assure you she has no trouble talking,” Barrett said. She added that an adopted son “joined our family in 2010 when he was 3 years old after the devastating earthquake in Haiti.”
Such an emotionally charged atmosphere even around Amy Barrett’s children shows the fever pitch of the whole presidential race and also a passionate discussion on a stimulus bill that will probably matter the most for the markets in the next couple of weeks. Also if one of the presidential contenders does not fall asleep unexpectedly at the debates, or does not make some other epic fail before the voters, then the battle will most likely continue to the last drop of blood, followed by the very high volatility in the market too. Even the excellent data on industrial profit from China on Saturday, or the nearest European business survey this week may not be the key factors against such a political cause with a mid-term financial effect.
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