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President Trump’s path to re-election is getting ’exceptionally narrow’: Fmr. Speaker of the Florida House

Former Vice President Joe Biden's lead is widening against President Trump as battleground states continue to count votes. Former Speaker of the Florida House and Weatherford Capital Managing Partner Will Weatherford joins Yahoo Finance Live to discuss.

Video Transcript

ZACK GUZMAN: I also want to focus in, though, on what all of this means for investors out there and how they should be rebalancing portfolios perhaps here as we see another rally underway here today. The Dow trading near session highs, up nearly 600 points. So to break that down for us, we're joined by our next guest.

Will Weatherford is Weatherford Capital managing partner and former Speaker of the Florida House. And Will, it's a pleasure to be chatting with you today. I mean, you're watching this play out, an incredible rally not just today, but also building on what we saw yesterday. What's your take right now on what the market is saying about where we sit with the election results we have now?

WILL WEATHERFORD: Well, I think it's pretty clear that the markets are giddy about the opportunity of having a divided government for another few years. And so, you know, the markets are betting on and I think counting on a Trump presidency. The walls appear to be closing in on President Trump and his options.

And so because of that, the market's saying to themselves, you know, we've got a pretty conservative court. A lot of regulations that could come out of an administration could get slapped down. You've got a Republican Senate that can kind of prevent anything from happening, like packing the courts and things of that nature. So it's almost kind of a bit of a status quo. And I think the market's responding exceptionally favorably to that. And I'm not surprised.

ZACK GUZMAN: On that front, though, I mean, it's going to be a little bit before we know the full results here. So I don't want to jump ahead, but I mean, we were talking about expectations heading into this. Investors expecting until about Friday, according to a Jefferies poll, to wait for these results. So what happens in your mind if maybe some of that expectation around the status quo starts to break down as we get these results?

WILL WEATHERFORD: Well, I think if what I just said ends up not being true, then the volatility, of course, will go up because the market's kind of counting on it. You know, I would say the pathway for President Trump exists. It is getting exceptionally narrow.

And I think his team knows that. Every team in campaign talks really positively about all their options and the ways that they're going to win right up until they lose. And so I don't blame them for trying to seek every avenue, but the fact of the matter is, it's a very tough uphill climb for him. It's even worse for the Senate. And I think that's one of the big stories that's been missed.

And I agree with Doug earlier. This was a huge night for the Republican Party, when you think about members of Congress, the United States Senate, state legislative bodies across the country like the one I served here in Florida. It was a big night for Republicans. And frankly, it does appear to be a repudiation on the president, not necessarily on the Republican Party. So I'm counting on a divided government. I think the market is, too. And I think they're right.

AKIKO FUJITA: Will, so much attention being placed on the election, but of course, we've been getting a lot of earnings. And in the meantime, looking at these S&P 500 companies, 82% reporting already. 85% of those companies beating their projections. You could certainly argue expectations were so low coming into the quarter, but what's your read on what we've seen so far and how the recovery shapes up, based on what we've heard from these companies?

WILL WEATHERFORD: Yeah, well, I still think we have a long way to go. And I agree that the expectations were low, but we're a resilient people. And these are resilient companies. And the world changed last March.

And everybody had to figure out how to navigate and live in a world where a global pandemic was spreading. And I think it just shows the level of ingenuity in our society and our country and our companies that are here to figure out to find a way to generate revenue and ultimately generate a profit for their company and for their shareholders.

And so, I think it's a very positive sign. There's a long way to go. We don't know exactly what's going to happen this winter. But we know things are going to get worse. The numbers yesterday and really for the last two weeks have been quite frightening. But Americans find a way. And I think the world's going to find a way to fight through this, and it doesn't mean it won't be bumpy. But I've been impressed and hopefully will continue to be impressed with the ingenuity of American companies.

AKIKO FUJITA: And when you look at the quarterly reports so far, cyclical sectors certainly providing the most surprises there. We've talked a lot from analysts about this rotation out of tech into cyclical. And yet, if you look at the rally over the last few days, tech continuing to lead the way because, in many ways, it's become the safe haven play. When you look at all the uncertainties that line up, how are you positioning yourself?

WILL WEATHERFORD: Yeah, I mean, I think you said it very well, which is, certainly cyclicals have been in vogue here for the last few months. And there was a move there. But, you know, honestly, if you're betting on a 21st century economy, it's hard to bet against tech right now. And, you know, certainly, there's certain companies within that sector that are maybe overvalued and overpriced.

But generally speaking, it's a sector that's going to continue to grow. It's a sector that is touchless in large part. It's a sector that can perform in the middle of a global pandemic. It's hard to bet against it.

It's just kind of interesting. Here we are. You know, in the 20th century, we were betting on things like utilities and other safety nets. And now, you know, everybody's gravitating to tech. And when you think about what we're facing as a country and as a society, it's easy to understand. Because that's where the growth is, and people are chasing growth and ultimately, yield.

ZACK GUZMAN: Yesterday, we were talking with Tom Lee on the show here, Will. And he was talking about the VIX and the drop there. I mean, it's down. He was saying, look, it seems like investors are going with the status quo you're talking about here. Keep your eyes on that as it approaches 25. It was up above 35 when we were looking at kind of the shaky week we had last week.

If that continues, though, and investors go with this status quo, you're talking about tech there, but what other opportunities are you looking at that you like looking into next year, should this recovery continue on the path that we've seen?

WILL WEATHERFORD: Yeah, I think we'll see the VIX pop up again. I mean, when you really think about it, it's hard to imagine with everything that's going on in the world right now that there's not going to be more volatility. We've been through this season. I think everyone's kind of taking a breath. There seems to be some stability economically, or maybe politically would be a better way to say it.

As that wears off and then we wake up from this period and say to ourselves, wow, there's 100,000 people a day that are getting the coronavirus in the United States and it's growing rapidly across the country, there's going to be some gyrations. So I anticipate the VIX going up and down for the next few months or so.

But I would also say with regard to tech, we like betting on the cloud. I mean, I think the transition to the cloud is real. It's obviously happened in the private sector. It's happening in the public sector. We are potentially-- not potential. We are investors in cloud-based technology companies that are selling into government. We think that's a big open space.

So I think, you know, this transition to a 21st century economy and ultimately the utilization of the cloud to bring better services to companies and the government is early innings, probably in the second or third inning, and a long way to go in a safe place to put money.