Donald Trump and the Chances of a 2nd Term Curse. Do the Markets Need it?

Bob Mason
·6 min read

U.S politics has not been so widely headlined since the days of Watergate and John F Kennedy.

Even Hollywood actor Ronald Regan was unable to draw so much media interest, with MJ and the likes by his side.

It certainly won’t be a Presidential term in office that we will forget any time soon.

With so much uncertainty surrounding the global economy and its recovery, can Trump make it to a 2nd term?

There have been reportedly 21 U.S Presidents who have gone on to a 2nd term in office. For those interested in history, there is even second term curse…

In all seriousness, however, the curse that allegedly brings down approval ratings is likely to come down to a need for change than anything else. Or so you would think.

In fact, 2 U.S presidents were assassinated in their 2nd terms, these being Abraham Lincoln and William.

Grant faced the panic of 1873, Eisenhower went through the overcoat scandal and more. Lyndon Johnson had the Vietnam War to grapple with, Nixon had Watergate and that mess, Ronald Reagan had the Iran-Contra affair.

More Recent Disasters

In more recent times, Clinton had the Lewinsky scandal and impeachment pardon controversy.

George W Bush had the global financial crisis, one that few will forget, and finally, there’s Barack Obama.

He was certainly not free of controversy, with the Snowden leaks and terrorist attacks on U.S soil. And, let’s not forget the U.S government shutdown in 2013. Well, the latter is a norm these days.

So, there has been plenty of controversy during the so-called cursed 2nd term.

Why is this interesting? Well, just consider what the 45th U.S President Trump has conjured up in his 1st term. Perhaps let’s not.

But for those who can recall the past three-and-a-half years, it has been quite a spectacular 1st term. Most of which have been for the wrong reasons.

Does anyone need Donald Trump to experience the curse of the 2nd term? He ticked the impeachment box in term 1, which really only leaves one major achievement in term 2. After all, he already delivered the worst economic crisis since the global depression… Oh no, that was China…

Worse yet, he’s playing Beijing off with Moscow in the run-up to the Presidential Election. The markets seem to be quite calm about this one, but for me, this is the biggest threat to the political world order as we know it today.

For those interested in the 2nd term curse, Wikipedia has all the thrills and spills… It is missing a Trump’s photo with a question market, however. Some countries will almost certainly be hoping for an end to the chaos and tomfoolery…

The Opinion Polls

So, while we can sit and talk about it, the numbers can do the talking for us.

What’s going wrong? Well, he’s lost the woman’s vote. According to a recent poll, Joe Biden reportedly has a 20 point lead among women voters. That must be a conservative number…

Then there is the vote of the African American. The latest riots and slaying of George Floyd means that Trump loses another whopping percentage of the vote.

According to a recent article by the Washington Post, more than half of all Americans answered yes when asked whether they think that Trump is a racist. This was off a Yahoo News-YouGov poll. The article didn’t say how thought that he wasn’t a racist…

Almost horrifically, Trump reportedly tweeted on Tuesday claiming that he had done more for the black community than any President since Abe. Well, when we consider 2nd term curses, that may be a claim that he may like to take back…

Digging holes is something that Trump is accustomed to doing. But he continued on From Tuesday’s tweet according to the Washington Post. On Wednesday, Trump added that he had done more for the Black population in three-and-a-half years than Joe Biden has done in 43-years.

He’s going to need to garner that vote and hope that African Americans forget about George Floyd. It’s a big ask…

Well, simply looking at the odds of who is heading for a November victory says it all.

According to an article by CNBC, Trump has seen his favored odds of winning vanish in a week. Biden’s chances of winning have reportedly risen to 50%-43% on Smarkets and 53%-46% on Predictlt.

If you strip away the layers, Trump could have argued that he had delivered economic prosperity before the COVID-19 pandemic.

Distraction tactics have failed, however. China has flexed its muscles, Trump has u-turned on Putin and that’s before the mixed messages over Iran. All of this before you consider the handling of the COVID-19 pandemic and the fallout, economically.

It would be somewhat obtuse for the U.S President to cite U.S equity gains when the unemployment rate sits at 20%… Few care whether his country club buddies are raking it in.

The Global Financial Markets

Back in 2016, we saw the global financial markets surge in response to the Trump victory. Making America Great Again was a catchy slogan, even if the red cap wasn’t.

His desire to unite America has ended in tears. He will attempt to stand tall but in the end, the shine has gone. While I write about him, I also wonder where the Trump clan has gone. It wasn’t long ago that they were also enjoying the front pages. Now they make it to engagements out of necessity rather than will…

For now, the markets continue to find support from the easing of lockdown measures and fiscal and monetary policy.

In the coming weeks, however, the cat could come out of the bag. June’s nonfarm payroll and unemployment numbers are going to need to impress. Last week’s 1.877m increase in jobless claims suggests that fiscal policy support is not getting to where it needs to.

For many, the upward momentum in the equity markets looks unwavering. All you need to do, however, is go back to earlier in the year. It wasn’t pretty.

This time around, it may ultimately be Trump’s demise that props up riskier assets. Joe Biden couldn’t have imagined such a playing field.

Whether he can restore America to its former glory, however, is an altogether different proposition. As a minimum, the Democrats would need control of both houses.

At the time of writing, the EUR was up by just 0.04% to $1.12376 against the Dollar. For all the misgivings and questions over the EU project, the Trump Project is looking far shakier.

This article was originally posted on FX Empire

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