On Monday, February 10, CFA Society Boston hosted its Annual Market Dinner featuring guest speaker David Wasserman, House Editor for The Cook Political Report. Over 500 financial professionals attended the evening to network and hear insights from one of the nation’s top political pundits on the eve of the 2020 New Hampshire primary.
The 2020 U.S. presidential election may prove to be a pivotal one for financial markets. “We aren’t a political organization, we are a professional organization, but our investment industry, and in fact the very health of this country’s economy, and perhaps even the global economy may just lay in the balance,” said Michael G. Trotsky, CFA, chair of the Society’s board of directors, during his opening remarks.
Also speaking at the program was Kurt N. Schacht, JD, CFA, Managing Director for the standards and financial integrity division at CFA Institute. Kurt highlighted CFA Institute’s recent efforts to engage with policy makers in the nation’s capital to enact measures that both serve the interests of investors and protect the integrity of financial markets. CFA Institute recently expanded into a new Washington, D.C. office, which Kurt heads.
Wasserman’s keynote presentation reviewed the 2020 election road map. The following are some highlights from his presentation:
- Lifestyle Realignment of the Electorate – Wasserman ascribed today’s highly polarized political climate to the lifestyle realignment associated with voters’ tastes, creating what he referred to as a “culture gap” in the electorate. For example, counties that contained a Whole Foods supermarket tend to lean to the left, whereas those containing a Cracker Barrel restaurant would lean right. In every election since 1992, the culture gap has widened from 19% to a whopping 54% in 2016—that is to say that President Trump won 76% of Cracker Barrel-containing counties versus 22% of Whole Foods-containing counties. The contrast is even more stark when comparing Luluemon counties to Tractor Supply counties.
- Congressional Balance Likely to Remain Status Quo – The House of Representatives is likely to stay in Democrats’ hands, who may even expand on the number of seats held given the challenges that Republicans face from retirements and redistricting. Republicans, however, are slight favorites to keep control of the senate, but Wasserman notes that important races to follow will be Arizona, Colorado, Maine, and North Carolina due to the incumbent GOP candidates’ vulnerabilities in those states.
- Trump a Narrow Favorite to Win Re-election– Notwithstanding the controversies that have mired the current administration, the incumbent candidate does have history, the economy, and electoral math in his favor. Republican support for the president remains strong, and in only 3 cases in the past 70 years has the sitting president lost an election (that figure includes Gerald Ford, who assumed power via the 25th amendment). Trump’s approval rating for handling of the economy at this point in the cycle is higher than that of his two-term predecessors Obama, Bush and Clinton. And while shifting demographics tend to favor the Democratic party, they are predominantly occurring in the least competitive states.
- Democrats Need to Achieve Order Out of Chaotic Primary Start – Even though Democrats have moved on from the fiasco of the Iowa Caucus, they must still find a way to unify behind a compelling candidate to have a chance at unseating President Trump. The field is spread out between progressive candidates such as Bernie Sanders and Elizabeth Warren and more centrist candidates such as Joe Biden. Billionaire Michael Bloomberg, who has a massive self-funded war chest of campaign money, throws another wrench in the primary battle. Wasserman believes that only a balanced ticket can win, intimating at the possibility of a ticket that includes former Vice President Joe Biden and former Georgia gubernatorial candidate Stacy Abrams.
With Super Tuesday just around the corner, perhaps we will have some clarity as to what the remainder of 2020 will bring.
Click here for pictures from the Annual Market Dinner
Special Thank You to Our Event Sponsors
Platinum Sponsor
Invesco
Gold Sponsor
T. Rowe Price
Patron Sponsors
CCR Wealth Management
CIBC Private Wealth Management
Loomis, Sayles & Company
Payden & Rygel
Champion Sponsors
Assette LLC
Augustine Financial Solutions LLC
New Frontier Advisors
North Sky Capital
VanEck
Image: David Wasserman Speaks at CFA Society Boston's 2020 Annual Market Dinner