Trump Announces Reopening Roadmap (Photo: Chris Kleponis/Polaris/Bloomberg)

It is way too soon to write off President Donald Trump in the upcoming November election, and Joe Biden’s lead in the presidential race is not as huge as it seems, according to Jim Bianco, president and founder of Bianco Research.

It is “100% true” that Biden is ahead of Trump by 8-10 points in the national polls, Bianco said Tuesday during the Hedgeye webcast “Investing in a Fed-Fueled Speculative Mania.”

Although he predicted Biden will almost certainly win the popular vote, his lead in about 10 battleground states “is three points — not eight to 10” now, Bianco said.

And “it wouldn’t take much for Trump to bottom out and have a resurgence to really make this a horse race” over the next four months, Bianco said, adding that although Trump may still lose, the race is “far from being over right now.”

Also, take the betting markets with a grain of salt when it comes to the outcome of the election because they merely serve as “real-time polls” that “aggregate all the information we know into one probability — they don’t have any special knowledge,” he told host Keith McCullough, CEO and founder of Hedgeye. The betting markets currently give Trump about a 40% chance of winning the election — not exactly impossible odds for him to beat, Bianco said.

“The bottom line is Trump was doing well until about April and he has fallen off quite a bit” since then because “I think people are mad at him,” but he “can make them un-mad” at him, Bianco said. However, he conceded Trump might not be able to accomplish that.

Don’t Count on Economy Roaring Back Quickly

Although Trump apparently sees the economy returning to its pre-pandemic position as a key to his re-election, Bianco predicted that likely won’t be happening anytime soon.

The COVID-19 pandemic has forced us to “shut down so much of the economy [and] you’ve impaired so many people” from their ability to pay “their lease or pay their rent or to get their job back that even if you had the ‘magic bullet’ [of] a vaccine or a cure … it might not help the economy on the margin,” he said.

As just one example, if a restaurant is in a load of debt, “the damage has been done and it can’t be undone by a vaccine.”

It may also be too late to reverse lifestyle changes that have resulted from the pandemic, he said. For example, he asked whether commuters are going to suddenly hop back on the Long Island Rail Road each day to travel to work in New York City just because there is a vaccine.

People have grown so accustomed to and fond of working from home that they may persuade their companies to let them continue doing that — if not every day, some days, he noted. But even a decline in the percentage of days that people spend at their offices may lead to companies reducing their office space, he said.

“There’s going to be some permanent effects” of the pandemic and they are “going to be a drag on the economy,” he warned.

Bianco also warned that, although the Federal Reserve’s “continuing to print money” is working to stabilize the economy and grow the markets now and that may continue to help the economy as the pandemic continues, “ultimately I don’t believe it’s going to be good for the long term.”

— Check out Powell’s Problem? ‘He Can’t Print Jobs,’ Says Fed Watcher on ThinkAdvisor.