Presidential Election Preview: 3 Things to Watch
With the Presidential election less than three weeks away, political tensions are high.
The first Presidential debate was more characterized by the candidates trading jabs and interrupting each other than actually debating major topics. The second Presidential debate was canceled due to concerns over the coronavirus and President Trump’s recent bout with it. And the final Presidential debate is now scheduled for Thursday, October 22.
What can we expect this time around?
There are certainly plenty of topics for the two candidates to focus on, from the U.S. economic recovery to the unrest across the country. But there are three things that I’m personally closely watching in the days and weeks leading up to the Presidential election, as well as in the weeks and months following the election.
A Coronavirus Vaccine
First, the coronavirus pandemic and need for a vaccine will likely take center stage at the upcoming Presidential debate, simply given the White House’s recent confirmed cases.
As we discussed back in mid-August, there were three main biotech companies in the race for a vaccine: Moderna, Inc. (MRNA), Pfizer, Inc. (PFE) and Novavax, Inc. (NVAX). Of course, they’re not the only companies, as hundreds of vaccines are currently in development around the world.
Typically, vaccines can take years to be developed, approved and brought to market. The reality is that there’s a three-stage clinical trial process, including human trials, before a vaccine can even land on the FDA’s desk for approval. The mumps vaccine was the fastest-ever vaccine to earn approval, and it took four years![1]
Still, with the government’s Operation Warp Speed, billions of dollars have been funneled into research and clinical trials for a coronavirus vaccine. The goal was to have 300 million doses available by January 2021, but the Trump Administration was hopeful to have a vaccine receive emergency approval from the FDA by the November election.
Unfortunately, this appears to be highly unlikely at this point, especially given the FDA’s new safety guidelines for vaccine developers. The FDA wants biotech companies to have at least two months of data on clinical trial participants before the company can request emergency approval.[2] As a result, an FDA-approved coronavirus vaccine isn’t anticipated until 2021.
Another Stimulus Package
Along with the coronavirus vaccine, it looks like a second stimulus package may be punted until after the November Presidential election, too.
Wall Street was certainly a bit manic during the first full trading week of October when President Trump halted stimulus negotiations and announced that he would not support the House’s stimulus package. But President Trump then tweeted that he wanted to pass a “major stimulus bill” that puts money back into the pockets of small businesses and Americans.
Since then, the two sides have been back to the negotiating table. The House has proposed a $2.2 trillion stimulus package, while the Trump Administration countered with a $1.8 trillion package. Now, it’s up to Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi to find middle ground and come to an agreement that will appease both sides of the aisle.
Considering the stalemate between the House and Trump Administration, another stimulus package isn’t likely to be approved in the near-term. But, with the recently announced layoffs at big-name companies like American Airlines (AAL), Disney (DIS), Royal Dutch Shell (RDS) and United Airlines (UAL), a second stimulus package may be vital to the continuing U.S. economic recovery.
ACA Supreme Court Decision
The other hot-button topic that’s making headlines ahead of the Presidential election but won’t be resolved until after the final votes have been counted is the Supreme Court case involving the Affordable Care Act, or more commonly known as Obamacare.
Obamacare has been controversial ever since the law was passed more than a decade ago. Specifically, conservatives argue that “individual mandate” that requires all Americans to have a certain level of health insurance coverage is unconstitutional. Congress did overturn the financial penalty associated with the mandate back in 2017.
With the recent death of Supreme Court Justice Ruth Bader Ginsburg, there are fears that Obamacare will be overturned during the upcoming case, and millions of Americans could lose health insurance coverage. The new Supreme Court Justice nominee, Judge Amy Coney Barrett, is a conservative, and many believe that, if she is confirmed ahead of the November 10 Supreme Court Case, Obamacare could be overturned.
Overall, Americans have a lot to consider with the upcoming election. You can be certain that a coronavirus vaccine, a second stimulus package and the upcoming Supreme Court case will be widely discussed not only at next week’s Presidential debate but also at water coolers (or Zoom meetings) up until the November 3 election.
And no matter who wins the Presidential election, these issues won’t magically disappear; they’ll linger in the coming weeks and months. That means headlines surrounding each still has the ability to whipsaw the stock market on any given day. If you’re concerned with how these issues could impact you specifically, please give me a call today.
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[1] https://www.nationalgeographic.com/science/health-and-human-body/human-diseases/coronavirus-vaccine-tracker-how-they-work-latest-developments-cvd/#close
[2] https://apnews.com/article/virus-outbreak-archive-efdb363953cc5e2d64028b60baabdc90