It’s 511 days to the 2020 Presidential election and we sense a total disconnect between the movement in the polling data and market expectations of the outcome.  It reminds us of our conversation with a hedge fund manager one month before the midterm who was certain the Republicans would remain in control of the House.

We laid out our “Lavender Wave” scenario of at least a 35 seat pick-up by the Democrats– they eventually gained 40 House seats.  He wasn’t having any of it, however,

“I better check with my pollster.”

We do try and keep our partisan bias out of our political analysis and focus solely on the movement of the polling data in a disciplined analytical framework.  We have won a lot of bets from those who cannot and are out of touch with the data.

In fact, we know of nobody except yours truly that predicted Trump would win the electoral college and Hillary the popular vote in 2016.

We simply looked at the dispersion of the Hispanic vote, which many were betting would determine the outcome on the margin because of Trump’s offensive rhetoric, and found it was mainly concentrated in California and Texas.  We concluded these states would not flip and would cancel each other.  Nevada and New Mexico were the other two states where the Hispanic vote was concentrated enough to have a significant impact on the electoral vote.

2020 Presidential Election

Now Wall Street believes there is a 70 percent chance Trump is reelected.   Have they not looked at the data or is it just wishful thinking?

The Morning Consult tracking poll illustrates the devastating movement in polls since President Trump took office.  In every state that is going to matter in November 2020, there has been a double-digit negative move against the President’s approval ratings even in the reddest of red states.

As of the May polling data,  the President is above water in only 2 of the 17 states,  Texas and Georgia, and just barely.   This contrasts sharply with February 2017, when Trump’s approval rating was higher than his disapproval in 15 of the 17 states.

Stanley Gets Its

One smart dude appears to be looking at the data, however.  Stanley Druckenmiller, the great hedge fund manager,  thinks the President is in “deep, deep, trouble.”

Druckenmiller said he believed President Donald Trump will lose his reelection bid thanks to discontent in key swing states. He said the Republican president got lucky in 2016 and could lose if Democrats run a more centrist candidate. The problem, he said, would be if a “crazy” Democrat beats him.

“I personally think it’s going to depend on the Democratic candidate, but he drew an inside straight: He won seven out of seven states by less than half a percent,” Druckenmiller said this week. “If you go county by county in Pennsylvania, Michigan and Wisconsin, he is in deep, deep, deep trouble. And that was with the economy growing at 3%.”  – CNBC, June 7th

One Day Is An Eternity In Politics

Much can happen in the next 500 days and the world may be a totally different place.  Moreover, the Democrats are more than a year out before officially nominating President Trump’s opponent.

In the 1988 presidential campaign,  Massachusetts Governor Michael Dukakis held a 17-point lead over Vice President George Bush coming out of the Democratic convention at the end of July only to lose the general by almost 8 percent of the popular vote and an electoral landslide of 426-111.  Gary Hart, a much stronger candidate than Dukakis, and the clear front runner to take the nomination blew up early in the nominating process over allegations of extramarital affairs.   Monkey Business.

It doesn’t seem that President Trump will have the ability to turn the vote as Bush #41 did unless the Democrats nominate a very, very weak candidate, which is not a zero probability, by the way.

Our analysis leads us to conclude Trump will not be able to move women, who make up 52 percent of the electorate and more likely to vote than men, or the younger voters no matter the level of the Dow or the GDP growth.   His numbers are very ugly and pretty much set in stone.    The latest poll, today’s Quinnipiac, shows Trump 25 points underwater with women and 30 points underwater with 18-34-year-olds.

Unless President Trump reinvents himself into a kinder, gentler metrosexual and completely reverses his views and policies on global warming  — how will that play with the base — it is game over for his presidency if women and the younger voters show up in November 2020.

The Lefties Are Coming 

Wall Street is also going to have to come to grips with the politics of the younger generations.   We have been writing about this for years.

But it’s hard to look at the generational data and not see long-term disaster for Republicans. Some people think generations get more conservative as they age, but that is not borne out by the evidence. Moreover, today’s generation gap is not based just on temporary intellectual postures. It is based on concrete, lived experience that is never going to go away.  – Davod Brooks, NY Times, June 3rd

Once again, we find ourselves betting against the conventional wisdom of the Street.

The Russians Are Coming? 

Finally, the Russians really have their work cut out for them in the November 2020 election.  Expect the unexpected, folks.

Nothing surprises us anymore and most don’t seem to care.

The Russian government interfered in the 2016 presidential election in sweeping and  systematic fashion…

The presidential campaign of Donald J. Trump (“Trump Campaign” or “Campaign”) showed interest in WikiLeaks ‘s releases of documents and welcomed their potential to damage candidate Clinton…

The social media campaign and the GRU hacking operations coincided with a series of contacts between Trump Campaign officials and individuals with ties to the Russian government.  – Mueller Report 

As always, we reserve the right to change as the facts change.