As election years go, Greg Valliere, chief global strategist for Horizon Investments, called the current one the “nastiest” and “most unserious” he has ever seen.
“I've never seen anything like this in my life,” he said Monday in Orlando, where he was the keynote luncheon speaker at the IMCA annual conference.
In his frank analysis of the presidential election, and it's ultimate impact on the economy and the financial markets, Mr. Valliere made it clear that he isn't rooting for any particular candidate. But, added that if Republican frontrunner Donald Trump wins, he will be rooting for “a really windy inauguration day.”
Assuming Mr. Trump is the eventual nominee against Democratic frontrunner Hillary Clinton, Mr. Valliere does not expect the nasty tone of the campaigns to change for the better.
(Related read: How the 2016 presidential candidates stack up with advisers)
He described Mr. Trump's momentum as largely grounded in the support of “mostly white men in the middle of the country who are angry, because they have had stagnant incomes for a decade.”
In terms of his chance of wining the presidency, Mr. Trump's biggest weaknesses, according to Mr. Valliere, are his high disapproval ratings among Hispanics, his lack of foreign policy experience, and his age. If elected, Mr. Trump would be the oldest president ever entering the office.
The challenges facing Mrs. Clinton are equally significant, even though she has long been seen by most political pundits as inevitable to win in November.
“Hillary is hardly a shoe in, even though she's the favorite,” Mr. Valliere said.
Among the points stacked against the former Secretary of State, he said include the difficulty for the same party to win three consecutive presidential terms, and “the damage inflicted on her by Bernie Sanders.”
Mr. Valliere said the Vermont senator has not only “tied Hillary to
Goldman Sachs,” but has “inspired an entire generation of young people” to support Mr. Sanders.
That second part is something Mr. Valliere said the financial services industry should be concerned about. “These young people have developed great antipathy for banks and Wall Street,” he said. “Sanders has done a very bad thing to Hillary by tying her to
Goldman Sachs, and you have to wonder if all these young people will turn out in November for her.”
Other obstacles facing Mrs. Clinton's run, he added include near constant campaign trail gaffes by her husband Bill Clinton.
“Bill is constantly making it about him, and at least once a week the Clinton campaign has to clarify or apologize for something he said,” Mr. Valliere said. “And then there's Bill's sexual history. I've been told he's no longer dating, but Trump has made it clear the Bill's sexual history will be a part of the debate. And Hillary will have to perhaps face allegations that she looked the other way or even worse, enabled it.”
Mr. Valliere also cited two troubling polls showing that Mrs. Clinton's negative approval ratings are over 50%, and “the majority of Americans say they don't
trust her.”
“The only way to get elected president when most people say they don't
trust you, is that they
trust your opponent even less,” he said.
Mr. Valliere said the ultimate wild card for Mrs. Clinton involves all the investigations surrounding her related to the Benghazi terrorist attack on a U.S. Embassy, the Clinton Foundation's finances, and her use of a personal email server while she was Secretary of State.
“The FBI is in the home stretch with the investigation into her server,” he said. “They are already interrogating her closest aids, and they will eventually interrogate her.”
In terms of how the financial markets would react under each of the frontrunners, Mr. Valliere started with Mr. Trump and how much the markets hate uncertainty.
“Trump would be the mother of all uncertainties,” he said. “He has virtually promised a trade war with China, there is major friction between him and the Federal Reserve, there's the enormity of his proposed tax cut, and he's talked harshly against the market themselves.”
While Mr. Valliere expects Mr. Trump would surround himself with experts, it doesn't appear that he has done that yet.
“He is talking about taking at least half of all Americans off the tax rolls, and creating a $10 trillion revenue hole that he says he will fill by getting rid of waste, fraud and abuse, which tells me he doesn't have a plan,” Mr. Valliere said. “Sometimes when I see Trump's comments on the markets I have to check to see if it's Elizabeth Warren talking.”
(More election insights: Wells Fargo: Election year is hurting U.S. equities)
A Hillary Clinton presidency, he said, would also come with its own uniqueness.
“While I think the senate will flip to the Democrats, I think most of what Hillary tries to do will be thwarted by Congress because the Republicans will maintain control of the House,” he said. “She is part of the group that likes to regulate everything from clean air to the amount of salt in our diets. And because of her gender she might be challenged militarily, but Hillary has far more testosterone than Barack Obama.”
In one piece of sad reality, Mr. Valliere predicted that, “The purest investment play in Washington is the defense sector, which does well under either party.”
Backing up his claim that “this is the most unserious election ever,” Mr. Valliere pointed to the absence of any campaign talk about some of the more serious issues facing this country, including a fast-growing heroin epidemic, a nuclear arms build up in the Middle East, and a virtual lack of economic growth.
“I do not see this economy headed toward
recession, because I see some decent growth and an improving labor market, I just wish we had some adults to talk about these things,” he said. “But not in this election. No way. This will devolve into the nastiest election of our lifetime, guaranteed.”
