Global Investing Post-Trump
greg beier macroESG.com 14 june 2020 11:30 pm new york
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Macro ESG is calling the election definitively for Biden. While this is a clarion call for the US, its equity market leadership echos throughout the world and will shape corporate and national priorities for the next three decades.
What is the investment opportunity?
Growth will be in renewables, public health, technology privacy, education, infrastructure, basic materials, micro-agriculture, and affordable housing.
Decline will be in military spending, corporate jets, ultra-luxury brands, financials, hydrocarbons, consumer finance, social media, online shopping, and cellular services.
Markets will be positive post 2021, but as interest rates have hit bottom, it will be real growth, not empty liquidity-driven growth.
Biden wins.
Macro ESG had weakly predicted a Biden win – but now a Biden win is clearly shaping up strongly. Trump’s poll numbers are crashing (he has the same numbers as Jimmy Carter and George H. W. Bush in June before their elections),
Corporates are supporting the anti-racism movement (Apple, Google, NASCAR, NFL, etc) with $1.7 billion in funding which means that they won’t be funding his presidential bid.
Trump has lost the support of the Pentagon - there will be no last minute war.
General Miley’s video apology that he had made a mistake joining the President on a walk across Lafayette Park, a political action that was an error for a uniformed officer, put the Trump era to bed.
Putin’s comment this weekend that it’s inconceivable for him to imagine that parts of the government would not listen to him shows how extraordinary the Pentagon’s move really is.
China is actually in bigger trouble on trade under Biden.
China will be contained by a renewed US/EU alliance.
The Biden Administration will lead a serious diplomatic effort to strengthen NATO and joint EU/US initiatives. The UK begins the long arc of swinging back into the EU.
China will continue to grow but the Belt and Road program will degenerate into a failed fringe initiative.
Technology will be attractive – just not as attractive.
Large tech companies will be broken up.
Privacy rights, establishment of international norms.
China 5G production will be diminished.
Human rights will be the hallmark issue under Biden – and around the world.
The sharp edge of US foreign policy initiatives will be centered around human rights, restoring America’s traditional legitimacy after the two failed wars in Iraq and Afghanistan and the bizarre Trump messaging.
This will put China under pressure, highlighting their structural weaknesses, particularly with the Uighurs and the decline of Hong Kong.
Lesser developed countries will become less enthusiastic about taking Chinese money and government support.
Chinese language study will decline around the world.
The strong-men will fall – Duterte in the Philipines, Bolsonaro in Brazil, Erdogan in Turkey, Orban in Hungry, etc.
Russia.
Putin will become isolated but will move to align with the West out of fear of growing Chinese power.
G7 leaders will continue to shun him. Russia is stuck in a periphery of its own making.
The covid crisis.
The covid crisis is accelerating again and it may ultimately end with broad national shut downs to protect countries from a second wave.
If this were to happen, America would undoubtedly move to a single-payer health care system within 5 years - leading developing nations to follow suit.
Oil becomes a stranded asset.
The move to renewable energy becomes a global goal.
Crown Prince MBS will become a leader in the renewables movement through Aramco and the aggressive investment of Saudi cash. He really doesn’t have any choice - he has to build a wildly successful corporate play or he is finished politically.
Investment in hydrocarbons falls to a trickle.