Republicans Lose Key Seats
The 2019 US gubernatorial elections, held yesterday, marked an important shift in voting habits. Just one year out from the next US national elections, Democrats made gains in the key states of Kentucky and Louisiana. Virginia, the Democrats took control of the legislature for the first time in over two decades.
In Kentucky, Democrat candidate Andy Beshear succeeded in toppling the incumbent Republican governor Matt Bevin with a lead of 0.4%. However, Bevin is reportedly unhappy with the results, claiming “irregularities”. The loss of a Republican seat in Kentucky will be a major blow to Trump, not least because he personally attempted to rally support for the former governor at a campaign event on Monday night. During his speech, Trump said that Bevin losing his seat there would be portrayed as “the greatest defeat in the history of the world”. While the Republicans lost the governor’s seat in Kentucky, they did succeed in five other votes in the state, including the election of the Attorney General.
In Virginia, Democrats succeeded in toppling the Republicans in both chambers. Notably, the election of Danica Roem, marks the election of the first publicly transgender person to the house along with Ghazala Hashmi, the first female Muslim to serve in the Senate. Interestingly, Virginia also saw the election of Juli Briskman as district representative for Loudon County. Briskman first made her mark in 2017 when she lost her job following US media coverage of her making a crude gesture at Trump’s motorcade.
Despite the Republican’s losing the governor’s seat in Kentucky by the smallest of margins, the loss is a symbolic one given the swelling tide which is rising against Trump. Recent polls continue to highlight dwindling support for the infamously controversial President who has disappointed much of his original support base with nearly two years of tariff wars with China. The trade war has been heavily negative for the US economy, in particular, the farming sector. While Trump is fighting now to repair his relationship with US farmers via the proposed “phase one” trade deal with China, the campaign for Trump’s impeachment is now also driving his support base lower.
The new ABC News/Washington Post survey showed the US president trailing former VP Joe Biden by 17%. Biden is the candidate that Trump was allegedly trying to enlist help from the Ukranian president to thwart. The poll also shows Trump 12% behind Vermont Senator Bernie Sanders who is described as the most socialist of the Democrat candidates. Elizabeth Warren, the newest of the democrat contenders is also seen as 15% ahead of Trump currently. Warren, Sanders and Biden will head off against each other for the Democrat presidential nomination next July.
Impeachment Hurting Trump
The poll also gave an insight into the damage caused by the impeachment campaign which has flared up against Trump. The poll noted that 60% of those polled believe Trump to be a liar. These results come just a week after another poll showed half of voters were in favour of Trump’s impeachment. Despite the results, however, Trump remains adamant that he still has the support of the majority of the US electorate and is happy to point out how his “surprise” victory in 2016 confounded pollsters. While this is true, the ongoing impeachment campaign certainly holds the potential to further weaken Trump’s support which could make things very difficult for him next year.
Technical & Trade Views
S&P500 (Bullish, above 3031)
S&P500 From a technical and trade perspective. Price is currently stalling at the weekly R1 at 3075.4. With momentum studies stretched to the topside, the volume spike into recent highs could mark an interim top here seeing some short term pullback. However, With Longer-term VWAP remaining supportive any retest of the broken former highs at 3029.6 will likely find support, keeping the bullish bias intact.
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