Here’s what you need to know about the US election debates:
- President Trump’s first debate was a childish disgrace.
- Biden agrees to 2 more debates! Don’t waste your time!
- The moderator could not control the debate. No-one was impressed.
- Trump is laying the foundation to undermine confidence in the election process.
- Trump blames China for coronavirus and gets very personal with Biden’s dirty laundry.
AND Trump has Coronavirus and will be in quarantine for half of the remaining election campaign. This must hurt his chances on November 3.
A Democrat win in next month’s US election would mean more fiscal spending to get the economy going. Unfortunately, at this stage of the election, the lawmakers aren’t able to come to an agreement about the next stimulus package. The Democrats want to spend about $2.5 trillion [while] the Republicans only want to spend around $1 trillion. A deal on the next round of stimulus seems unlikely to happen before the election on November 3. Earlier would lead to greater economic momentum – and market momentum (the market is very keen on the stimulus!).
This stimulus is important to support the investments people are making into cyclical recovery stocks. The US can’t rely on tech stocks to drive markets much further. Cyclical stock earnings need to pull their weight now. Without confidence in a cyclical upturn those investments are suffering at the moment.
Central banks will provide stimulus – timing is the issue.
Trump is looking to decrease tax. Biden is going to increase the corporate tax rate and increase the top-tier income tax. A Biden win could be negative for listed US stocks – based on the tax and spending implications.
Australia
In Australia we are waiting on our own Budget – hoping for stimulatory measures to pump money into the economy. The Prime Minister is expected to use the budget speech next Tuesday (6 October) to signal measures to cut tax, build new infrastructure, fund more skills development and “rebuild the economy” from the recession. If this were the case it would be good news. Pre-released so far is an incentive to the tune of $1.5bn to create manufacturing jobs in minerals processing, food and beverage, medical products, recycling and clean energy, defence and space.
This fiscal stimulus is important to get Australia past the peak in government support which occurred in July-Sept 2020. Why is this important? We are now in the “fiscal cliff” that so much has been written about – where government support/initiatives fall from $105bn to $25bn.
Let’s hope the budget is a pearler!
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