Karl Rove. (Photo: Bloomberg) Karl Rove. (Photo: Bloomberg)

Two political heavyweights agreed Wednesday — a day before the second presidential debate — that former Vice President Joe Biden would be the likely winner of the presidential election.

“Trump is the embattled incumbent,” David Axelrod, political consultant and analyst and former chief strategist for Barack Obama’s presidential campaigns, said on a Wednesday webcast held by ETF Trends. “He is losing among senior citizens, suburbanites, college-educated voters — all the groups he carried in 2016 — [including] independent voters. That has been consistent. You see it throughout the country, state by state.”

Added Axelrod: “Over 40 million people have already voted. That’s like a little less than a third of what we saw in total in 2016; by [Thursday] night it might be 50 million people have voted. The people who say they’re not decided — which is a very small sliver — are the least engaged voters and unlikely to be watching a debate.”

Karl Rove, architect of George W. Bush’s 2000 campaign, agreed that “it’s an uphill fight” for Trump, but stated: “I wouldn’t rule him out.”

Trump, Rove said, “is closer to Biden today than he was to Hillary Clinton at this point in 2016. I also think it’s very difficult today to get a good poll.”

That being said, Trump’s “got a very difficult time in Michigan, Pennsylvania and Wisconsin. If he loses those three, he’s at 260 in the Electoral College and it’s very hard to see that he’s got many opportunities to pick up elsewhere.”

Rove added, however, that “I think we ought to be a little bit cautious about it this time around because last time everyone assumed it was going to be Hillary — including Hillary — and I think including Trump, and it was a little bit of a surprise to everybody” when Trump won.

“I think we ought to be very careful about assuming that the election is baked and cooked,” Rove said.

Trump prevailing “depends entirely on how in the next 13 days he conducts his campaign,” Rove continued.

A winning strategy for Trump now, he continued, is to focus on the economy — his economic strategy compared to Biden’s. Trump needs to ask: “Who’s better to restart the American economy?”

Investor Expectations

Advisors were polled during the webcast on who would prevail. The majority, 68%, said Biden would win and the market would be up 5%.

As the ETF Trends poll showed, “Investors have the begun to become comfortable with this idea that it’s likely going to be a Biden victory,” Michael Arone, chief investment strategist for SPDR ETFs at State Street Global Advisors, added on the webcast. “We’ve been saying all along in our research this election is probably closer than many people think.”

What are investment folks doing?

“In our Select Sector SPDR ETFs we are seeing a pivot towards parts of the market that would benefit or perceive to benefit under a Biden administration,” Arone said. “A big pickup in infrastructure spending, a fiscal stimulus package expected by the Democratic Party, we are seeing a pivot toward materials, industrials and financials even as the expectations that interest rates have started to decline, the yield curve has started to steepen … although regulation might get tighter under a Biden administration.”

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