SKEPTIC’S GUIDE TO INVESTING
Straight Talk for All, Nonsense for None
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Your Hosts - Meet Steve Davenport, CFA and Clem Miller, CFA as they discus the latest in news, markets and investments. They each bring over 25 years in the investment industry to their discussions. Steve brings a domestic stock and quantitative emphasis, Clem has a more fundamental and international perspective. They hope to bring experience, honesty and humility to these podcasts. There are a lot of acronyms and financial terms which confuse more than they help. There are many entertainers versus analysts promoting get rich quick ideas. Let’s cut through the nonsense with straight talk!
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SKEPTIC’S GUIDE TO INVESTING
Harris vs Trump: Business and Politics
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Will a sudden change of candidates reshape the entire investment landscape? Steve Davenport and Clem Miller navigate the seismic political shifts that followed President Biden's unexpected withdrawal from the 2024 Presidential campaign. With Kamala Harris stepping up to the presidency, we delve into her qualifications, background, and the ripple effects this transition could have on investors and the broader political scene. We'll also touch on Trump's evolving political journey, the swift maneuvers within the Democratic Party, and how this upheaval impacts delegates' voting rights.
As the election looms closer, we contrast the compelling dynamics between Trump and Harris. Will Trump's once-entertaining antics now be perceived as liabilities compared to Harris's steady, apparently business-friendly approach? Explore the preferences of CEOs, Harris's connections to Silicon Valley, and the high stakes surrounding her vice-presidential pick. We scrutinize potential alternative candidates like Shapiro, Newsom, and Cooper, pondering their influence on battleground states and the constitutional intricacies of a Harris-Newsom ticket.
Preparing for the key issues that will shape the election, we examine the social, economic, and military policies at play. From the Supreme Court's potential to overturn landmark cases to the complexities of economic data, we break down how these factors might sway voter sentiment. Military policy continuity between Biden and Harris is expected, though Harris may adopt a tougher stance on the Israeli-Palestinian conflict. Finally, we discuss the potential impacts of a Harris presidency on various sectors, including energy, healthcare, technology, and finance, and how her strategic VP choice could shift election dynamics and sectoral outlooks. Don't miss out on this detailed exploration of the transformative political landscape.
Straight Talk for All - Nonsense for None
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Hello everyone and welcome to Skeptic's Guide to Investing. Today, Clem Miller and I will be discussing the just unprecedented events of the last two weeks. I think we've talked a little bit about how unusual this time can be around elections, but I don't think anybody has expected the deluge of daily information and ideas going on as the change keeps on happening. So, in particular, Kamala Harris has been appointed or anointed by Biden in terms of how he thinks that he should step down based on his health now, even though he told everyone this is not what I'm going to do. He broke down this weekend in his home in Delaware with his COVID cough and he was all alone and I think that he saw data from some of his closest advisors that told him there was no path to victory and he did the thing for his party that I think a lot of people have been asking and it will ultimately probably be a benefit to his ultimate destiny and how he is viewed by history.
Steve Davenport:But I think today Clem and I want to talk about where do we go from here. How does the election and what happened change, stay the same or get worse? Are we going to have more disruptions and more uncertainty. There's certainly going to be lawyers filing motions all over the country, and I think we've got to expect that some of them may find a pleasant court that will agree with what they have to say. So my question for you, Clem, is what about Kamala Harris? Is she ready to be the president and, if so, how is she going to affect investors?
Clem Miller:Well, thanks, steve, I appreciate that and I think that you know just sort of backing up a little bit. I'll come back to your question about whether Kamala is ready or not. Little bit. I'll come back to your question about whether Kamala is ready or not. You know, I think that that you know Trump. You know in our last conversation I had suggested that Trump may have peaked at the time of the Republican convention and I that's something I continue to believe that I don't think there's an additional peak for Trump ahead of, ahead of in the future. I think Trump, you know, probably did peak with the Republican convention and, of course, after uh, the uh assassination attempt. So that opened up an opportunity, after the convention, for Biden to change the entire nature of the race, which with which the Democrats came together to support Kamala Very fast.
Steve Davenport:Is it frighteningly fast. I have a question here about you know how do you make that decision in such a way as it really does consider all of the available angles? Because it felt like they coalesced in almost too quick q fashion. p They just made the decision and went with it and I think it leaves a lot of questions about those 14 million people who voted for Biden in the primaries and whether the delegates necessarily would feel the obligation if he tells them that he supports her. Do they always or need to follow that recommendation, or is it still up to the individual elector?
Clem Miller:Well, there's legally and then there's reality, right, which often diverge. My understanding on the legal front is that the delegates can now vote for whomever they want to vote. There is no ownership by a candidate once a candidate withdraws, they're basically now released to to vote for whomever, right?
Steve Davenport:I mean I think they have to vote in the first ballot, if he's still on the ticket, but after the first ballot I think they become yeah, yeah, well, yeah, and then you've got that because once he steps out of the race, then he's not on the ballot, so therefore their first ballot becomes open.
Clem Miller:But you know, practically all that is sort of legal right, practically speaking. You've got a situation now where really a large majority of the delegates have already indicated of the delegations, and the delegates within them have indicated that they're going to support Kamala Harris. So they've already made that transition, kamala Harris. So they've already made that transition. They're already, they're already acting as a political herd following the directions of Biden and other party leaders. The particular rules might imply you know, these are the political parties, they're political parties. They can change rules if they need to.
Steve Davenport:They haven't had to change rules in this case, so you know the parties I think it ends up being a much better solution because I think going to the convention and waiting, trying to figure out a multiple candidate situation yeah, and also they had they even before biden resigned.
Clem Miller:They had to uh do it before the convention because you had this issue with ohio um, where the ohio republicans were refusing to allow the uh to allow the refusing to allow Biden to be on the ballot, because the convention came after their filing deadline. So they were going to have to do some kind of online delegate polling ahead of the convention anyway. And they're still going to do that, and my understanding is that this afternoon the Democratic National Committee is going to sit down and write out the exact procedures which would allow them to do that so that they can meet that Ohio deadline.
Steve Davenport:Okay, we may have started diving deep a little early. Let's take a step back and look at Kamala Harris. As a woman of color, she represents a lot of good things to the diversity, equity and inclusion efforts. I think that when we look at her first we look at she's a lawyer. She's a lawyer and she's been an attorney general in California. She has worked hard on the cause of the average man and I think she has done a lot of things to try to stand out in her brief time in the Senate.
Steve Davenport:I think one of the things that I remember about the Senate was that when Obama joined the Senate, he was there a short time and he asked one of the sooner you start voting, the sooner you start establishing yourself. Then you establish a record that people can attack, whereas when you're early in your career and you don't have many votes tied to your name, it's a good time for you to go national and be recognized for your abilities instead of your votes in Congress. And I thought that was a very interesting approach because I had never. I thought you had to have relations and connections and all of these things in order to step up and be recognized for president. And I look at Kamala and I see the same thing. I mean, she really wasn't in the Senate very long before she put her hat in the ring.
Steve Davenport:I think she went into the Senate in 2018 and 2019. She was running for president. So when you think about how we elect leaders and how the process works, it sometimes can feel a little bit like the sausage factory. And when you look at her, she dropped out of the race before the Iowa caucuses, so her campaign was not successful and was not very. You know. There were a lot of questions about her style and her manner with her campaign staff and it just didn't seem like it was meant to be, I think on paper. You know, when you come from California, you bring with you you know obviously all those electoral votes, because it's likely that if you're a Democrat and you come from California, you're going to bring all of California with you is how unusual her life story is, her parents and their experience and how she's been so successful.
Steve Davenport:Also, the first husband is an interesting person and he brings a different situation to the White House. So I think that her candidacy really represents a lot of what's great about America and she is, in my mind, somebody who has a great opportunity in front of her. Some people might say she doesn't have enough time, she doesn't have enough experience, she doesn't have enough managerial experience. How is she going to get her staff up? How is she going to get everything together? And I think it's going to be a very interesting three or four months. The first thing I guess I'd say is it was a quick decision. It was a quick decision because we only have so much time. It was a quick decision because it was clear that she would be able to use the money that Biden has raised on the Biden-Harris ticket. So that's a hundred million reasons for people to feel, like she has a good head start. Her first day of fundraising, when she had already started just this week, was the first, I think, $100 million day that any candidate has ever had. So there's money out there that was waiting for a place to go and she's provided that place. And now I think it's clear. I can't decide whether we are for her because of her characteristics or we're for her because of the fear of chaos, of the alternative, and I think that this is as much an election about coalescing against Trump as it is coalescing for Harris. I think that as we go forward and get to know her, it should change and become more about Harris and not about trying to defeat Trump, because we know that Trump can defeat himself at times. Trump could defeat himself at times. So when I look at this race, I think that we need to stop and take a breath and really look at her and say what is it about her that I find exciting, interesting and giving the US a better position in the world going forward?
Steve Davenport:And I think the most ironic thing about this is last week. All we could talk about is age and age of Biden, and age of Biden was the you know talk of the day. We're supposed to be a society that doesn't have a bias against the ageism, but let's just put that to the side. Now I'm seeing more and more people coming out telling me that Trump is too old. And so well, biden might have been too old a week, trump, and previously she said we should have an age requirement of 75. I mean, you and I both know that as we move up in experience, we it's harder and harder to get things done. How do you now feel about age? Is age a problem? How do?
Clem Miller:you now feel about age, clint? Is age a problem? I don't think age is a. I think being too young is a problem sometimes. So, but I don't think Harris is anywhere near young enough. She's 59, which is which for many young people might even be verging on old, um so uh. But she has an appeal to the younger folks, uh and uh, and I think she's going to be able to uh exploit that in dealing with Trump. You know it's, it's not just that Trump is, is older. You know it's that Trump is crazier. That's the issue. No, but there is a, as you know that's that those two things can be.
Steve Davenport:There can be some causation there, can't there?
Clem Miller:right there can be, uh, but you know, I think you know, this kind of craziness has been, I think has always been there with Trump, and I think it was actually appealing to a lot of people who like a daily dose of humor in their lives, you know. So his, his craziness, you know, sort of appealed to a certain group who you know, who liked that kind of craziness. But you know, I think, I think with this election, a lot of people are going to look at Trump and say, you know, he is, he's the past, he had his chance. You know he made a lot of mistakes and Harris is the future, she's not bad. I mean, even the Republicans, a lot of you know normal Republicans are going to say she's not bad. And so they might, you know, they might switch over to her, possibly Right, or just not vote for Trump. Switch over to her, possibly right, or just not vote for Trump.
Clem Miller:You know, I, I think you know a couple of things.
Clem Miller:One is that is that there have been indications that you know CEOs have. I mean, there's this professor, I believe, at Harvard maybe it's somewhere else, mit, harvard, maybe it's somewhere else, mit who studies the behavior of CEOs, and this professor came out and said that he did a quick survey and found out that CEOs prefer Harris well over Trump, because Harris doesn't believe in the big tariff issues that Trump believes in and also Harris offers a sort of a framework of political stability and business stability that that that Trump does does not offer. Also, I would say that that you know Trump was trying to appeal to Silicon Valley, especially through his hiring of JD Vance a point that you made in our last call, steve and of course Harris has those connections to Silicon Valley. She's got connections there. So I think that sort of outweighs what JD Vance brings to the table. So I think that I think that Harris has a very good shot of beating, of beating Trump, I think part of. I think how much depends to some degree on who she picks as her vice presidential candidate.
Steve Davenport:Yeah, that's where I was going to go next. I think the VP will matter. I think this is a close election and I think everything is going to matter. I think the introduction is important. I think the you know people are hard to get a hold of. I used to say the election doesn't start till after Labor Day because people during the summer disconnect and a lot of people are not really paying attention until they really find out who's involved, what's their main issues and how do they benefit me, and so I mean I think that the VP pick could really make a big difference to her.
Steve Davenport:It's kind of confusing though when I look at it. We've got Shapiro, the governor of Pennsylvania, we've got Newsom, governor of California, we've got a retiring governor Cooper from North Carolina, gretchen Whitmer from Michigan and a few others. I look at this kind of collection and say I kind of think that you know, a Cooper or a Shapiro coming from a battleground state would really help, because I think they would probably bring that state with them, and I think that at this point Biden is somewhere between three and seven percent behind in most of these battleground states. I think they're going to tighten, and if you could turn one or two of them all of a sudden. That puts Trump on the defensive in those areas. Two of them all of a sudden. That puts Trump on the defensive in those areas. It means that he has to spend more money in those.
Steve Davenport:So I kind of think about this in terms of do you want the biggest name in California, which would be Gavin Newsom, or is he kind of neutralized because of the fact that Kamala comes from California already and has, all you know, a lot of the same connections?
Steve Davenport:They worked, you know, when she was in San Francisco he was mayor of San Francisco. So I don't think that Newsom really wants to be in this fight. I think he'd look at it and say there's too much of a chance to lose here and I'm the second on the ticket. It used to be that people said I want to run second on the ticket once before I run for the president, because then I go to go around and shake all the hands and to get all the connections in every state that my number one has and I think of her and him being just too much California. So I don't know whether being someone who's that recognized hurts, but ultimately I think it would. It would a little bit, look, a little bit awkward, because I think people would be wondering if he's taking over or dominating the ticket.
Clem Miller:So, steve, I'm not sure that Newsom is constitutionally possible because they're both from the same state.
Steve Davenport:I heard. I heard that. I heard that. But I also wondered if it was one of those rules, like the voting in the, you know, at the convention, that somebody can go in and change the rules if they're.
Clem Miller:Nah, this is the constitution you can't right. I didn't know it was a state constitution. That was my question. No, no, no, US Constitution. So I think we can, but there might be some kind of technicality where maybe one of them has changed their registration or I don't know something like that. She has been living in Washington the last four years. So yeah, so maybe that that allows it the last four years.
Steve Davenport:So, yeah, so maybe that that allows it, but uh, I just think Newsome and Newsome's path, I mean he, he just looks like a guy who's been running for president for about 10 years.
Steve Davenport:I just think we're going to get this guy into the ring so we can get him out of the ring. I want to, I want to see him on the stage and I want to see him um, but I don't really know if this is his time right. I think shapiro and cooper are kind of my two um best estimates as to who would be the the a good vp choice for her. I think they're both experienced, I think they're both, you know, more moderate and I think they come from battleground states where it's not that clear that you can be completely. You know you have to get Republican votes in order to win in that state. So therefore, they both had to work in states that were pretty conservative, and Cooper, especially, has done a good job reaching across the aisle. So if I was to pick one, I'd have to pick cooper. Um, I think about the vp choices and do they really?
Clem Miller:matter. Yeah, they, they definitely matter, no question about it. Um, I think that, uh, there's three possibilities. That's who you mentioned. Um, who both would be good, because they're both governors, and so that brings some executive experience to the table as well, as, you know, having to reach across the aisle as a governor. I think Shapiro, because Pennsylvania is so important to securing enough electoral votes. On the other hand, cooper's good because maybe it puts North Carolina back in play. But there's a third option.
Steve Davenport:I think that North Carolina now is showing about a seven-point Trump advantage versus Pennsylvania. I think is two or three.
Clem Miller:Yeah. So if you were, a betting person, you would. And then the third option I would throw out on the table, though not a governor is Mark Kelly out in Arizona?
Steve Davenport:Yeah, I've heard the Kelly argument and I hate to say this um, I like hair. Somebody who has no hair I have. I have trouble with that whole concept so uh.
Steve Davenport:So so you like, do you so you like beards like uh, because trump, I understand, doesn't like jd vance's beard I imagine he would have some kind of you know, um, I imagine he would have some kind of you know basis on his.
Steve Davenport:I just think it comes down to a lawyer who is younger and who has more vibrancy and more energy, versus a TV personality slash businessman who has more personality than we want to deal with. Want to deal with and not necessarily you know. The nagging thought I have Clem is still about how quickly her campaign went down in 2020. And I just I understand why Democrats might be nervous about her on the ticket as the main person, because it's just, you know, it's been a while since she's won an election, so I think that in some parts of this country she will be hailed and she will be wanted and she will be supported. I just remember that it's the electoral college stupid. It's not the number of votes. And I think that when I see people talk about strength in California, california has its votes, but guess what? So does South Dakota North.
Clem Miller:Dakota and any Democrat could walk out of bed and get California's votes, because California's Democrat.
Steve Davenport:That's why I kind of think that, you know, the Gavin Newsom thing doesn't make sense. But I still see educated writers and magazines that are open and papers that are well-known still saying what about Gavin Newsom? And I, I'm I'm tired of hearing about Gavin Newsom, but I, I gotta, you know I've got to bring them up because I'd be incomplete if I didn't. But I agree, mark Kelly has some interesting. I do like your other point, though, about having managerial experience and having a budget and having an ability. I think it also helps to have somebody who's from outside Washington. I think outsiders bring a new perspective to Washington and I think that can be very helpful, especially if you know what is going to happen with Trump.
Steve Davenport:Trump has managed to not really anger too many people and gain a lot of support from his convention and from the assassination attempt. Is he going to continue to be more genteel and less offensive as we go through the season? I think he's going to become very energized. I think the debate in September. My question is if it benefits Kamala, would you recommend that they do more debates, because I think one debate between the two candidates, especially not having seen her before, isn't really fair and they should at least have one more debate, because if they schedule two for the presidency and the person drops out, they need to still have two. What do you think about debates?
Clem Miller:Yeah, I agree with you. If the original plan was to have debates between two debates, then it makes sense to have two debates between Harris and Trump. I agree with that. What do you think about? But you do that. It opens up the entire negotiation and we'll see where that negotiation lands.
Steve Davenport:Yeah, where do you think the issues will be that we focus on for both Kamala and I mean, I think inflation and the economy are number one in terms of issues. I think that the Republicans would like to say immigration is the number one issue, but I'm not sure it is for most of America. I think it is for people in California and people in Arizona and people in Texas, but I'm not sure it is the national issue. I think inflation still is a national issue. And then I think the last question is about militarily where are we deployed and how does Kamala address some of those Biden issues or Biden decisions? Is she going to be with him? Or I guess I have a question about how does Joe influence the election?
Clem Miller:You got a lot of questions here, Steve. You got a lot of questions.
Steve Davenport:Has his capital been deferred or diminished in people so that he stays more on the sidelines? Or does he represent, you know, that union connection that is necessary for most Democratic candidates to succeed?
Clem Miller:Okay, you have okay, so a lot of questions there, steve, so let me run through them pretty quickly. First of all, I think the biggest, I think the biggest set of issues and they're connected in this election is going to be around social issues that have a Supreme Court content to them. So not just abortion and Roe v Wade, but also the move in the Supreme Court towards sort of raising the prospect that some, an increasing number of prior cases are going to be overturned. That might take away, you know, further rights from people, and so I think that's going to be, uh, the number one set of issues. Number two set of issues are going to be around, uh, the economy, uh and uh, and there they're going to have to. You know each side is going to have to make, uh their points, but I think people are going to get lost in the numbers when it comes to that issue. I agree with you that immigration in most of this country is not considered a real issue. It's not as significant an issue as you might be seeing, as one might be seeing through the various kinds of misinformation and disinformation that are out there. So I do think it's the social issues that are the most important.
Clem Miller:Then the second question you asked was about the military aspects. The military aspects and I think I'm not sure whether you're referring to any potential of military moves before the election and inauguration or whether you were talking about military policy. But I think, on military policy, I don't see any change that Harris is going to bring to Biden's policies. I think there's gonna be absolute continuity. I think she doesn't challenge NATO in the same way that Trump would challenge NATO. I think that the Ukraine policy will not be amended under Harris. I think Harris might be a little tougher on the Israeli-Palestinian situation than maybe.
Steve Davenport:Yeah, that's what I was going to say is that, you know, her husband being Jewish, is that? And it just says Trump's son-in-law, jared Kushner, became involved in the Middle East. How does that impact? I've got to think that Netanyahu is on a short leash and I don't know how he's able to continue with, you know, the president saying you know he needs to stop, and he keeps going, and so I I don't know if she will be able to further. You know, move this along, so that it, you know, we have a slightly different point of view, but yeah, netanyahu is a problem for the Israeli people Right and the problem for the Palestinians too?
Clem Miller:Oh yeah, of course. But but he, he's a problem. It's not a, it's not just, it's not a black and white thing. I mean, he's a real problem for Israeli security, and you could see that on October 7th, where he did not adequately defend the Israeli people against Hamas, and and he hasn't suffered the appropriate penalty for that as yet. So, and then the last thing you were asking there was military. I forget what the last thing was. You were asking Steve.
Steve Davenport:I just wonder how other foreign leaders are going to view her. Oh, I think I think they would find her to be a better partner. Oh, no question, I don't know if we know enough about her in these situations to really get a full picture of this. I think that we've looked at her in immigration down at the border, trying to figure out how to solve that. I think she's been deployed in various situations and I'm not sure I understand how she views the US position in Taiwan. I'm sure it's very similar to Biden's but I'm not positive.
Clem Miller:My understanding is that she's been on a lot of phone calls with Biden to foreign leaders, so I think there's going to be continuity between really mean this. Characters in the world who would view Trump as a good ally or good partner are the normal rogue bunch.
Steve Davenport:Yeah, I think I'm not sure how Vance enters in or does any. You know the hillb have left here, left because America wasn't wise enough to realize that these other countries aren't following any environmental rules, they aren't following any labor rules, they aren't following any decency in terms of minimum wages, and that hurts the US and loses businesses and that has hurt this middle and lower classes of the United States. So I think that there is a part of this that has to do with one of those. Again, I know you don't like me to say this, but it's the messy middle, stupid. It's those people who are on the fence and independent and they represent 30 or 40% of the country.
Clem Miller:When you mentioned messy metal, it brought to my mind this theory about the median voter and I mentioned that in our last call. And whoever is the median voter gets to determine the outcome of the election and I think it was up in the air who the median voter was when it was Biden versus Trump. I think right now the median voter is going to go for Harris.
Steve Davenport:I think if she makes the right pick for VP and she shows that she is not a product of the California extreme elitism, I think that one of the things that I keep seeing is income inequality, income inequality, income inequality and how are we going to address that? I think if she does a good job of talking to that average worker and says to them I'm gonna be a better supporter Biden was a good supporter of you and I'm going to be even better I think that message could have a lot of strong results for them. I think that Trump will characterize her and pigeonhole her as left-wing liberal, as left-wing liberal only interested in the rich and keeping all of these social issues, which a lot of those people in the middle don't like, to make the reason for their vote right. I think that there's a lot of people who want to be taken care of in terms of being treated fairly, and I'm not sure that you know Trump is going to treat them fairly. But I also think that Kamala needs to come out and show how much she cares about the middle class, because to me, the middle is where this is going to be won, and if you look at it right now, I'd say she looks a little bit left of middle and if she picks a VP who is more of a middle centrist, I think that will help her move to the middle in a smoother way.
Steve Davenport:I think. If she doesn't move to the middle, I think it's over, because I think that they're already behind in the polls and I don't know if you're going to. First of all, I don't know how much attention we're going to get until after Labor Day. As I mentioned. You know it's hard to get people to focus. I think there will be a great deal of focus around the convention and then I think we go to sleep for a couple of weeks and then we wake up after Labor Day and we look at the polls and we're you know, I mean, that's. That's just how it's been in the past. This time could be completely different if they add another degree and the debate is in in in august.
Steve Davenport:I don't think it can be because of their convention, but maybe late, late august it could be very interesting.
Clem Miller:So, Steve, what is the September-October surprise?
Steve Davenport:I wouldn't be surprised if, while Biden is president, he does things that are beneficial to the election of Kamala. So I think that Joe isn't done. I think that everybody has put him. You know the fact that the way this was handled, glenn, I think you would agree. If you were him, you would have been a little bit offended, right? You tell everyone I've made my decision and Pelosi keeps telling them we have to wait until you make a decision.
Clem Miller:Well, I made my decision, you just don't agree with it.
Steve Davenport:You want me to make another decision, and I think that Schumer and Pelosi and a lot of the big funders said oh, you made the decision, we don't like that decision. Go back in the room and come back with the decision we want. I think that Joe's legacy will be how he handles this transition and how he handles supporting her in a way that he's where he needs to be, but he's not, you know, because I don't think she can succeed as Biden's assistant. I think she needs to succeed as Harris candidate for president. I don't think it's going to be possible to separate herself somewhat from Biden, but I think she needs to try, because if she tries and if she delivers, I think it's going to be much harder for Trump.
Steve Davenport:Trump is going to label her as involved in everything Biden has done poorly I mean the Afghanistan decisions and the other things that have happened. I think it's going to be a very rough and tumble type of campaign type of campaign, and I think that when I look, you know Trump with Hillary in the debates was downright offensive and I look at him and say has he changed and matured or is he going to be just go back to the same guy. I would love to see these debates because I think the debates will tell us a lot about what type of what are they going to talk about, what are they going to characterize each other as, and how is that going to see something on the legal front?
Clem Miller:Now we're within the 60 days, or we will soon be within the 60 days, at that point where the Justice Department can't bring new prosecutions.
Steve Davenport:But you know there's a lot of existing prosecutions and I mean, I've all along said that I think that Trump won't make it to Election Day and I still will hold by that. I think the case in Georgia could create a wrinkle. And when I look at what's happening with Ohio, you look at that and say, gee, they really need this Ohio. They're not even sure they're going to win Ohio, but they really want to be on this Ohio belt and I think it's for that very reason that they just don't know. And if something good could happen in Ohio, then I think all of a sudden, I think the advance is kind of given Ohio to the Republicans because I think that they would vote for their native son and the native senator versus somebody who is unrelated. But I think that it's interesting, the Ohio factor, and I just think there's so many balls that are going to drop in the next three or four months. I think that the Fed could go with 50 basis point cut instead of 25 in September.
Clem Miller:I think that the Fed is sensitive to the politics. They're going to do nothing.
Steve Davenport:They said several times, they're cutting in September. They're cutting in September. It looks like a cut in September if all they do I mean they're setting it up like we're apolitical, it doesn't matter what we do. Well, I was on the fence and saying no way, no cuts. But you said is there a September surprise?
Clem Miller:I think that could be. Well, that would be the surprise, that would be a big surprise, and what would it do?
Steve Davenport:The markets would take off and I think that that would cause a lot of the moneyed interest to be okay, and this is where I want to go with the next. What is the benefit of Kamala Harris to the market? Where do you get a premium? If she wins, these stocks will do well. I believe it's solar and EV are going to do well in a Harris presidency.
Steve Davenport:I believe that energy, finance and health will suffer some in a Harris presidency for the same reasons Deregulation, more regulation in finance, healthcare, more negotiations for Medicare that are going to be tougher on pharmaceutical companies, care that are going to be tougher on pharmaceutical companies, and no leases on new lands for energy. So I think there's going to be, you know, both financial and health care just hit. You know all time highs and I think that when we start to think about that, if Harris starts to get momentum, those stocks are going to start to weaken and I think that as they weaken, there's going to be a fear in the business community that maybe this candidate that we find better than Trump is going to have some challenges in terms of how she supports businesses in California and elsewhere. What sectors are you liking if she's elected, and disliking as well.
Clem Miller:Well, I think that energy, I think, would not do well. Right, healthcare, I think it's a mix of do well and not do well, depending on what you're talking about. I think pharma will do well. I don't think the insurers, health insurers, would do particularly well under Harris. I think the technology sector, communications, I think, is likely to do quite well, relatively for sure, and I would say absolutely.
Steve Davenport:You don't see any regulation coming down on the big seven.
Clem Miller:I didn't say no regulation, but I think that I think that they already expect some regulation in certain, and they're getting some out of the EU right now. So I think they'll be able to manage that. But these companies are they're not. I mean, with some exceptions they're not terribly expensive at the moment and you know they have strong growth prospects. They're highly profitable. I just don't see, you know, today's market notwithstanding, I just don't see too much of a problem for the tech stocks in a Harris presidency. I just don't.
Steve Davenport:STEVE DIGGLEMANN. I'm not sure how to view it. It's early.
Clem Miller:MIKE GREEN and Steve on finance from prior podcasts and writings I've done. I just don't think banks are a great investment. In general they don't do well. Over time I think they're going to turn into utilities.
Steve Davenport:Yeah, they're turning More and more. It's going to be that you need to operate and offer these things to this part of the community, and we know it, whether it's the red line districts or there's just more and more desire to create something that's more stable than this boom and bust cycle that banks continue to find themselves in going to provide more regulation for finance and for banking.
Clem Miller:Uh, that will just keep it. Uh, you know, keep it as a utility. And I think there'll probably be more regulation of the asset management industry too, which would be kind of interesting yeah, I mean I think we agree on energy and Finance.
Steve Davenport:I think we disagree on health care, I'm not sure. Why do you think pharmacy is going to do well if they continue to negotiate for Medicare and other things? Don't you think pharmacy stocks are going to still find that to be a little bit, you know, obtrusive to their trying?
Clem Miller:to operate Well, okay, so, because I think it's a little complicated on pharmaceuticals, because you've got kind of two separate areas in pharma, and I think the government recognizes this too. One is the high, you know, those drugs that are in development and are in highly innovative areas, and I don't think that the government is going to do anything to, you know, to deny resources, pharmaceutical companies the resources to pursue that kind of innovation. I don't see it. I don't think they're going to try to stymie innovation.
Steve Davenport:So I think I just think the lifeline of a drug is really how profitable it can make it for a period of time, but if they put a Medicare price on it-.
Clem Miller:I think it's. They have to have smart pricing. These are smart bomb expressions. Did you just have to have smart pricing? He's a smart bomb expression.
Steve Davenport:They need to say government and smart pricing.
Clem Miller:Well, I know it has to be phased in over time, right? In other words, you make it cheaper. You put caps on in a progressive way that you know, rather than all of a sudden. Right, because you want to have you know earlier than all of a sudden right, because you want to have you know earlier on in the life cycle, you want to make sure that the pharmaceutical companies can price according to whatever the market can bear.
Steve Davenport:Okay. So we probably need to wrap this up a little bit. If I have, you know, some ideas that are outside the realm, and I'd like you to think if we could look at this candidacy and say what thing did we not realize would happen and could happen in the next three or four months to change this election. What I would say and this comes from our friend from the North, mr Thorne, in Canada. He suggested William Dudley as the VP choice for Kamala. He thought that he'd bring a lot of heft and a lot of economic and a lot of knowledge, and he's been, you know, against some of the actions of Powell and the Fed. So I think there could be a candidate that gets chosen. That's not part of this, you know.
Steve Davenport:Select five and someone that we just don't know, and I think it will make for I mean JD Vance and William Dudley in the VP debate. I think would be very interesting. I think that also it will allow her to separate from the economic issues and say you know, what should have happened with McCain was McCain should have had Romney as a VP, and then, all of a sudden, the whole debates would have been much different and it would have been a much different discussion than Sarah Palin and I think that when I look at her candidacy, I think that she would benefit from somebody with a huge economic and kind of experience in finance Just because I'm a person in finance and I think all of us are extremely valuable and insightful. But as a skeptic, I just don't know if they're going to make the right decision for VP.
Clem Miller:And I think that an outside decision could end up being positive or negative. So, steve, let me ask you this Do you think Trump made the right decision for his VP?
Steve Davenport:I think he made a decision that should have been expected for him. I don't think that he is. He seems to draw a lot of his energy from the middle of this country. When I see rallies going on in the middle states, I look at him and say how is this much of the people so excited and why are they so excited? And then I look and say he picked a vp from the middle of the country because he believes that that's, you know, his base. His base is these working class people who've been rust belt in places where factories have closed down, and those are the people who are looking for a change, and I think that jd vance fits that right. Did he pick somebody that was a woman or a person of color to show that he's more widely acceptable? No, and I think that it's easy to say well, he picked a white man. Therefore he's ignorant, because we're going to have, most likely, kamala is going to do the same thing.
Steve Davenport:I saw a cartoon and it showed a white wine stand and it said looking for another good white as VP. And I think it's. You know, white wine has its pluses and minuses, but I'll agree, it is kind of like choosing, you know from a milder version of the real thing. Yeah, the Bordeaux's and the Cabernet's, that's where the real juice is. These questions about picking a white candidate as VP I find it a little bit simplistic. So what do you think is something that we haven't thought about, that we should?
Clem Miller:I don't know. We've covered a lot of territory, steve. I mean again, I think the surprise could be on the legal front. And there are a number of things that could happen there. I'm not going to go through them all, all right.
Steve Davenport:Well, thanks for listening, and I appreciate everybody checking in with us. We're going to continue to offer more interesting insights on the election and if you want us to talk about something specific, please reach out and contact us. We are going to also have a podcast on CrowdStrike, so please continue to follow, continue to subscribe, continue to download, thank you.
