January 31, 2020 / 10:56 AM / 5 months ago

Breakingviews - Cox: Consensus long on Trump, short on Facebook

U.S. President Donald Trump rallies with supporters in Des Moines, Iowa, U.S. January 30, 2020.

ZURICH (Reuters Breakingviews) - Lots of people are saying Donald Trump will easily win re-election in November. If that sounds like the sort of language the U.S. president himself would use to describe his prospects, so be it. From Paris to Mumbai to Hong Kong and Toronto, the former reality television star was given the edge against his Democratic contenders in informal polls by attendees at Breakingviews Predictions events in recent weeks. Trump’s fellow New Yorkers, though, offered a variation on the theme that may bear consideration.

When asked about matters financial, there was broad consensus that fund managers like BlackRock, Larry Fink’s $84 billion fund manager, and Steve Schwarzman’s Blackstone would perform better than some other investments, including crude oil and shares of Masayoshi Son’s SoftBank Group. India was the economy most likely to prove naysayers wrong, with the United Kingdom rallying second. And when it comes to the long term, Facebook’s longevity looks less certain than Apple’s - or even that of thumb-twiddling currency traders.

For the record, Breakingviews makes no claims to rocket science with these informal surveys, which were conducted during panel discussions on topics ranging from environmental shareholder activism to the future of Canada’s economy, European banking union and the greening of financial balance sheets. Attendees were asked to give their opinions anonymously using handheld gadgets or an app on their telephones. And some questions were varied to suit the local audience – for instance, when asking about relative economic performance, Italy was the relevant market in Milan, while Canada was offered as an option for those voting in Toronto.

In all six venues where the question “Who will win the next U.S. presidential election?” was posed, Donald Trump snagged around 60% of the vote, with the highest conviction among Londoners, at 68% of those casting ballots. A similar consensus emerged last January when we asked guests at 2019 Predictions events for their views on whether the U.S. Congress would impeach Trump. More than half of those voting put the chance of impeachment at 30% or higher. In the end, the House of Representatives did indeed vote to impeach the president.

New Yorkers were offered a variation on the November 2020 question. They were asked “If the U.S. presidential election were held today, who would you vote for?” We thought it would be unfair to ask French, Italian, Chinese, Canadian, British and Indian attendees this since they cannot vote and are less likely to be familiar with the alternatives: Senators Bernie Sanders and Elizabeth Warren, former New York Mayor Mike Bloomberg and ex-Vice President Joe Biden.

Perhaps reflective of hometown bias, New York attendees opted overwhelmingly for Bloomberg, the founder of the eponymous news and information business that competes with Breakingviews parent Thomson Reuters. Hizzoner received 47% of the ballot, ahead of Trump’s 25%, followed by Biden, Warren and Sanders. Whether this provides any insight into how the rest of the American electorate will vote is hard to say – with the first of the primaries, the Iowa caucuses, only coming next week. Notably in last year’s polling, 82% of Big Apple respondents pegged a higher chance that Trump would be impeached than anywhere else. They were right.

On the macro front, Predictions attendees were asked “Which economy will deliver the biggest upside surprise in 2020?” India won out in five of the seven cities where polling was conducted, though Mumbai voters were somewhat less ebullient than New Yorkers and Milanese about their home-grown prospects. Just 41% of them chose the domestic option. Curiously, French and Hong Kong respondents pegged Britain as the economy with the greatest chance of an upside surprise. 

When it came to stock picks, money managers generally thumped the alternatives proposed in the Breakingviews polls conducted in five of the cities where events were held. BlackRock was voted the investment most likely to outperform in the coming year by 35% of Londoners and Torontonians and 30% of New Yorkers, with Blackstone following closely, and ahead of SoftBank, the British pound and crude oil. In Paris, when local bank Société Générale was substituted for BlackRock, 61% of respondents opted for Blackstone, suggesting little in the way of confidence in the domestic banking business. Italians were the most optimistic of the bunch on pound sterling, with 28% of them rating it ahead of euro zone banks, SoftBank and crude oil.

As for their longer-term views, Apple boss Tim Cook will be glad to know that the iPhone was voted the contemporary fixture least likely to be extinct by 2030 in four cities where the question was posed. Only Milanese respondents felt the euro was slightly more durable than Apple’s primary money-spinner. Perhaps that also explains why Italian attendees were the most bearish on the future of foreign exchange traders. The overwhelming favourite for extinction was Facebook, garnering half of Parisian responses, a third of those voting in New York and London, and being neck-and-neck with forex traders among respondents in Toronto.

Breakingviews

Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.


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