The U.S is 6 weeks away from the Presidential election. Yahoo Finance’s Alexis Christoforous and Brian Sozzi discuss what to expect with Invesco Head of U.S. Government Affairs, Andy Blocker.
ALEXIS CHRISTOFOROUS: Today marks six weeks until election day with the tension now firmly focused on the fight to fill Ruth Bader Ginsburg's seat on the Supreme Court. But the coronavirus pandemic continues to hang over the presidential race, a government shutdown could be just days away, and the future of the Affordable Care Act could hang in the balance. With us now is Andy Blocker. He's head of US government affairs at Invesco.
Good morning, Andy. Let's start with Justice Ginsburg's death. Fundamentally, does this change the race? Do you think that it can actually influence voters at this point?
ANDY BLOCKER: Thanks, Alexis. First, just want to acknowledge the loss of Ruth Bader Ginsburg, a true champion to the rights of all Americans. I think-- look, at the first point, this is essentially September surprise for President Trump. Anything that gets the message off of coronavirus is a win for President Trump.
The question is, is it a short-term win to distract people from that? Or is it a long-term? I think it also gives him an opportunity to remind his conservative base what he's done for them in the past. He's confirmed over 187 conservative judges along with two Supreme Court judges. And if he gets a third, that's another motivator.
The other side of this is Democrats are gonna be very motivated as well. As you saw with the Kavanaugh hearing back in 2018, you saw that motivated both sides. So at the end of the day, while in the short term, I think it helps President Trump, in the long term, I think it's a wash, and it just gets the bases out.
BRIAN SOZZI: Andy, has the-- has the market priced in what I guess many would call "Trump pick risk?" Really, a lot of-- a lot of people are focusing in on Judge Amy Coney Barrett potentially getting that seat. What do you know about her? And how would she influence policy and decisions moving forward?
ANDY BLOCKER: Brian, I think no matter who the justice is, it's gonna be a conservative judge, and I think that's the key. I think the thing we're watching at on a micro level for the markets is the fact that Obamacare will be in jeopardy no matter who the nominee is. And specifically, with the loss of the protections for-- at least in the short term unless they come up with new legislation-- the short-term loss of protection for pre-existing conditions. That can impact the health-- the insurance sector.
On the macro side, though, we think this is-- we're looking more in the macro side because we think this only exacerbates the current acrimony in the US Senate, what used to be the most deliberative body in the world. If Democrats win the House, the Senate, and the White House, this will only increase the chances of them getting rid of the filibuster. And if that happens, it's Katy, bar the door. You're gonna have more partisan legislation, less minority input into what finally becomes law, and you're gonna really see us become more of a parliamentary system than-- than the deliberative checks and balances that we had in the past.
ALEXIS CHRISTOFOROUS: Andy, would you say the most immediate risk for the market is a possible government shutdown? And-- and what would that do to the mix as we still, you know, wait for a possible stimulus bill to come out of Congress?
ANDY BLOCKER: So I think right now-- I think that's a great question, Alexis. I think the issue really is right now we think they're gonna avoid a shutdown, that they're gonna do the continuing resolution separate apart from discussions on COVID-19. But it could get joined back together.
On COVID-19 stimulus, right now we really haven't seen much motivation. There hasn't been a leverage point to get that through yet. And that's really hurting Americans at home.
You see the airlines threatening to lay off people if they don't get funding by October 1. That's tens of thousands of workers. You're seeing unemployment benefits even though there's some relief at $300 extra a week.
It's not the $600 it was before. There's gonna be a lot of pain out there. And the question is, does that pain translate out poorly and-- and politically?
BRIAN SOZZI: Andy, how destabilizing would a repeal of the Affordable Care Act be for the markets? Surely it's destabilizing for the health care space. But bigger picture thinking, what would do to the markets?
ANDY BLOCKER: Well, the health care sector is a large sector of our economy, and it has large cynicals. But we really believe that if it's struck down, I think the markets will adjust quickly, and there will probably be a move if-- especially if you strike down pre-existing conditions, there'll be a move legislatively or otherwise to fix that or correct that. But in the short term, we'd see a lot of volatility.
ALEXIS CHRISTOFOROUS: Andy, we've got that first debate a week away. At this point, does it matter much? Can it actually move the needle for those few voters who are-- I think it's about 10% or 11% of the voters who are on the fence at the moment.
ANDY BLOCKER: Yes, Alexis. You're absolutely right. I think the first debate is the key.
All the debates count, but the first one counts the most. And really what you're looking at in the first debate is whether Vice President Biden can stand on stage with President Trump and look like he belongs and look like he should be the next president of the United States. He just has to pass that first threshold I'm presidential, I can lead this country. Despite all the criticism I have received, I am competent and ready to do it.
The other part of it is, who lands a punch? Does either side lend a punch, whether it's Trump coming after Biden in a very forceful way, being domineering over him, making him look small, or whether it's Biden being able to counterpunch and keep the focus on coronavirus, which is what I think he wants the subject to be?