U.S. ELECTION WRAP: ‘Black Swan’ Theories Swirl With 7 Days to Go

As Hillary Clinton and Donald Trump zero in on the last full week of campaigning, investors and political pundits are increasingly focused on Election Day “black swans.”

Brexit Was Bad but Trump Would Be Worse, Says Temple

A Donald Trump victory, hidden voters, transit strikes, an Electoral College bust or even a Democratic sweep of Congress are among “black swan” events that could upend Election Day expectations and vex financial markets.

  • Global financial markets are betting on Democrat Hillary Clinton winning the White House, with Republicans keeping at least one chamber of Congress; investors may be ill-prepared for a surprise on Nov. 8, Bloomberg’s Phil Kuntz wrote in a U.S. Election Guide to Markets
  • The market is “certainly not priced for the November surprise, which would be a Trump victory,” Edward Dempsey, chief investment officer at Pension Partners in New York, told CNBC
    • “I don’t think anyone has priced that in,” he said. “I don’t think anyone is prepared for what that could mean. We would never have had a president who would be elected and have both parties set against him.”
  • Washington Post looked at the question nagging much of the Washington establishment: Could pollsters be missing hidden Trump voters?
  • “Trump obviously is the big black swan looming on the landscape,” Bloomberg’s Jason Kelly said
    • “The other thing that the market is really talking about is what if there is a Democratic sweep?” Kelly told Bloomberg TV; adds Clinton presidency and Democrats winning both chamber of Congress, seen as unlikely at this point, could mean “much more extreme things happening that investors may not like”
  • In Philadelphia -- a major metropolitan area viewed as crucial for winning the battleground of Pennsylvania -- public transit workers went on strike just past midnight Monday, triggering concerns about possible voting problems, CNN said
  • Two other long-shot but “not-impossible scenarios”: Clinton and Trump end up in a 269-269 tie or Utah backs independent Evan McMullin, and no one gets the 270 electoral votes needed to win the White House, Cowen analyst Chris Krueger wrote in a note to clients. Either of those outcomes would mean a newly-elected U.S. House of Representatives would decide the presidential race in January

NEW FBI RELEASE

  • FBI unexpectedly released 129 pages of documents related to an investigation closed without charges in 2005 into President Bill Clinton’s 2001 pardon of Marc Rich, a wealthy Democratic donor’s husband
    • File posted online Monday; received little attention until the FBI noted it in a tweet on Tuesday afternoon
  • Clinton campaign questioned “odd” timing of posting, which comes as FBI Director James Comey faces fire from Democrats and some Republicans for releasing information about a renewed investigation into Hillary Clinton’s use of e-mail
  • Release was result of FOIA request; posted under standard FBI practice, according to law enforcement official
  • Link to full story from Bloomberg’s Chris Strohm and Ben Brody
  • U.S. Attorney General Loretta Lynch continues to have confidence in FBI Director James Comey, an official said

POLLS/FORECASTS

  • Dollar, Mexican peso, Brazilian real traded lower after Washington Post-ABC News Tracking Poll tracking poll showed Trump ahead by 1 point, within poll’s error margin
    • Trump at 46% vs 45% for Clinton, assuming a four-way contest; Democratic enthusiasm has waned, according to the survey
  • Meanwhile, experts say to wait another day before buying presidential poll results, Bloomberg’s Kathleen Miller reported
    • Patrick Murray, director of Monmouth University Polling Institute: Tracking polls are “much more susceptible to changes in enthusiasm” than other types of polls because they rely on people’s willingness to answer their phones
  • Political analyst Stu Rothenberg: “Clinton is still the favorite, though her lead probably has shrunk by a couple of points”
    • “Any investor who reacts to a single poll is not a very good investor” Rothenberg says. “We need to see what other quality polls say”
  • Nate Silver on Twitter: “Mixed data this AM - bad nat’l polls for Clinton, bad state polls for Trump - but Trump chances up another tick to 26%”
  • Clinton maintains a lead over Trump in Virginia, 48%-42%, among likely voters: Washington Post-Schar School poll
  • In North Carolina, Clinton is at 42%, Trump 41.2%, and 8.7% are undecided, an Elon University poll found; within survey’s margin of error
    • Support for Libertarian Gary Johnson has declined to 2.6% from 9% in early October
  • In Pennsylvania, a new Franklin & Marshall College Poll showed Clinton ahead of Trump 49%-38% among likely voters, similar to her lead in last month’s survey
  • Trump leads Clinton 52%-38% among likely voters in Missouri, according to a Monmouth University poll, up from a 5 point-lead in October and a 1-point lead in August
  • One predictor not going Clinton’s way is the U.S. stock market, Bloomberg’s Rebecca Spalding reported
    • The performance of the S&P 500 Index has signaled the outcome of every presidential election since 1984, according to an analysis by Strategas Research Partners
    • Right now, the benchmark gauge is down 2.9% since Aug. 8 with just a week until the vote, a fact that in isolation augurs well for Trump; read full story here

ADVERTISING

  • Trump’s campaign said it is spending $25 million for TV ads in 13 battlegrounds, including Michigan, Virgina, Colorado and New Mexico
  • Clinton campaign plans six-figure ad buys in Colorado, Virginia, Michigan and New Mexico
  • The Clinton camp also is out with a new TV ad dubbed “What He Believes”; the spot uses Trump’s own comments regarding women

ON THE TRAIL

  • Clinton is in Florida, where former Miss Universe Alicia Machado introduced the Democratic nominee at a campaign event
    • The presence of Machado is part of Clinton’s strategy of highlighting her Republican rival’s remarks about women
    • Trump in September called Machado “disgusting”
    • Clinton’s running-mate Tim Kaine is stumping in Wisconsin
    • Clinton surrogates are blanketing the map, with President Obama in Ohio; Vice President Joe Biden in North Carolina; former President Bill Clinton making three stops in Florida; Sen. Bernie Sanders in New Hampshire and Maine; Chelsea Clinton in Colorado
    • The Clinton campaign said on Tuesday that it raised $11.3 million online in last 72 hours, the most at any point since Clinton became the Democratic presidential nominee in July
  • Trump and Mike Pence made a joint campaign appearance in Valley Forge, Pennsylvania, where they sought to capitalize on the recent difficulties surrounding Obamacare
  • Trump is set to campaign Tuesday evening in Wisconsin; he’s scheduled to make three formal campaign stops in in Florida on Wednesday

ETC.

  • House Speaker Paul Ryan told Fox News he already cast a vote for Trump
    • Republicans need to support the entire GOP ticket, he said
  • The Republican nominee’s plan to build a wall along the U.S.-Mexican border may cost him in border states, Bloomberg’s Jennifer Jacobs reported
  • Clinton will probably win Florida if the Sunshine State’s Latino voters turn out to vote, Washington Post’s Daily 202 said
  • Miami’s trade surplus runs counter to Trump’s view of U.S. failure; read Bloomberg story here
  • Both Clinton and Trump are preparing for a possible post-Election Day battle, with both camps deploying volunteers and lawyers across the country, according to Bloomberg’s Mark Niquette and Margaret Talev
  • Bloomberg’s Laurence Arnold looked at all the ways Nov. 8 will likely “shatter Election Day norms”; ABC News is out with an “Election Day Primer” of storylines to watch; topics include Russia and the future of the Republican Party
  • Financial Times on Monday endorsed Clinton for U.S. president; the Democratic nominee "carries enough baggage to fill a Boeing 747. She is not trusted by the majority of voters. But she is manifestly more competent than Mr Trump whose braggadocio, divisiveness and meanness are on daily display": FT
  • California voters, who’ve watched as Massachusetts and Colorado leaped ahead on causes such as gay marriage and legal marijuana, could restore its role as a laboratory of liberal policy-making with ballot measures to end capital punishment, boost taxes, require background checks to buy bullets and limit drug prices; click here for Bloomberg story

CONGRESSIONAL ELECTIONS

SENATE RACES (Republicans hold 54-46 majority)

  • IN: American Federation of Teachers’s political arm released TV ad of former Carrier Corp. worker who says Republican Rep. Todd Young is “protecting special tax breaks for corporations shipping job overseas” and “turning his back on the American workforce”
    • Ad refers to Young’s votes against Democratic proposals that sought to curb tax advantages for companies that outsource jobs abroad
    • “There is no tax break or loophole that addresses outsourcing or insourcing jobs specifically,” according to 2014 Politifact analysis
    • Young and Democratic ex-Sen. Evan Bayh are vying to succeed retiring Republican Sen. Dan Coats in one of nation’s most competitive Senate races
    • Carrier, an air conditioning manufacturer, announced in Feb. that it would move its Indianapolis operations to low-wage Mexico
  • MO: Republican Sen. Roy Blunt has 47% to 46% for Democratic Secretary of State Jason Kander, according to Monmouth University Poll conducted Oct. 28-31 of 405 likely Missouri voters (+/- 4.9 ppts)
  • NC: Democratic Senatorial Campaign Committee released TV ad saying “Washington has made Richard Burr wealthy” and he voted himself five pay raises and missed Armed Services hearings
    • Ad cites five votes, including Burr’s vote last December against an omnibus spending law that included language delaying congressional salary increase; DSCC chairman Jon Tester also voted against the omnibus
    • Burr said he voted against omnibus because it included “large scale spending” and didn’t overhaul tax laws or curb regulation
    • Burr has said his personal wealth increased mainly because of his wife’s successful real estate business
    • Deborah Ross’s campaign in TV ad promoted endorsements from newspaper editorials, including one from Charlotte Observer saying she “showed an ability to work with Republicans” as state legislator
  • NH: Democratic Gov. Maggie Hassan, looking to camera in TV ad, says voters have a “very clear choice” Nov. 8 between senator who “repeatedly votes with the corporate special interests” or a “new senator who sides with the people of New Hampshire”
    • Hassan, who didn’t mention Republican Sen. Kelly Ayotte, emphasized college affordability, job training, lowering prescription drug costs, protecting women’s health care
  • NV: Senate Leadership Fund, a Republican super-PAC, released TV ad criticizing Democrat Catherine Cortez Masto’s record as state Attorney General and urging voters, “don’t let Harry Reid force another political failure on Nevada”
    • Reid, the Senate Minority Leader eschewing re-election, is aiding Cortez Masto against Republican Rep. Joe Heck in only competitive Senate election for a Democratic-held seat
  • WI: Reform Wisconsin Fund, a Republican super-PAC aiding Sen. Ron Johnson, released TV ad attacking Democratic ex-Sen. Russ Feingold for opposing an Iran nuclear deal it says “puts Iran on a path to creating nuclear weapons”
    • Ad displays a large explosion behind an image of Feingold, as narrator says he’s had “30 years of being radical” and “30 years of being wrong”
    • Feingold’s campaign in memo said late surge in outside Republican spending shows that Johnson’s “corporate backers are panicking and hoping another few million dollars will fix the problem”
    • “Hint, it won’t,” said Feingold campaign manager Tom Russell, who pointed to advantages in polling and early voting

HOUSE RACES (Republicans hold 246-186 majority)

  • CA-49: Donald Trump, in tweet to aid Darrell Issa’s re-election hopes, says he’s a “very good man. Help him win his congressional seat in California”
  • CO-06: House Majority PAC, a Democratic super-PAC, released TV ad saying Trump “bragged about assaulting women” and Republican Rep. Mike Coffman “said he didn’t know if Donald Trump was a sexual predator”
    • “We just can’t vote for Coffman or Trump,” narrator says
    • House Majority PAC supports state Sen. Morgan Carroll, who’s seeking to deny Coffman fifth term in district that includes suburbs of Denver
  • IA-01: Democratic Congressional Campaign Committee released TV ad saying Trump and Republican Rep. Rod Blum’s “views on women are mirror images”
    • Ad shows video of Trump saying in March “there has to be some form of punishment” for women who have abortions if the procedure is banned; Trump’s campaign rescinded the remark
    • Ad says Blum “supports criminalizing abortions,” in reference to Blum’s May 2015 vote for legislation that would have banned most abortions at or after 20 weeks of pregnancy
    • Spot also says Blum “championed a bill to let employers fire a single woman just for being pregnant"; this refers to a religious freedom bill that ‘‘does not legalize the firing of single mothers,’’ according to Politifact
    • Democrat Monica Vernon, a former Cedar Rapids councilwoman, seeking to unseat Blum after one term
  • IN-09: Speaker Paul Ryan will campaign today in southern Indiana with Republican businessman Trey Hollingsworth, who’s in a race that’s ‘‘closer than he’d like,” WHAS-TV reported
    • “The reason why Speaker Ryan is coming into the district is because we have a race on our hands,” said Democrat Shelli Yoder, a Monroe County councilwoman who sought the seat in 2012
    • Hollingsworth said Ryan has “seen the Republican enthusiasm, people coming out to say, ’no more of these ultraliberal policies,’”
    • National Republican Congressional Committee in TV ad referred to Yoder as a “liberal politician” who would raise taxes “just like Hillary Clinton”
    • Hollingsworth and Yoder seeking to succeed Young in Republican-leaning district that includes suburbs of Indianapolis and Louisville
  • LA-04: Fighting for Louisiana, a conservative super-PAC, in TV ad described Republican state Rep. Mike Johnson as a “politician” who is “out of touch with our values”
    • Johnson among five Republicans on an eight-candidate, all-party ballot; a Dec. 10 runoff is likely
    • Marshall Jones, a lawyer, is the only Democrat seeking the Republican-leaning Shreveport-area district
    • Republican Rep. John Fleming isn’t seeking re-election and is instead running for the Senate
  • ME-02: Democrat Emily Cain in TV ad said Congress needs to “stop bad trade deals, lower energy costs, and protect Social Security and Medicare”
    • Spot doesn’t mention Republican Rep. Bruce Poliquin, who beat Cain 47%-42% two years ago in district that includes most of Maine’s land area
  • MI-01: Republican Jack Bergman’s campaign yesterday received $2.7k from the pro-Trump Great America PAC and $1k from Wyoming lawyer and House candidate Liz Cheney, according to Federal Election Commission report
    • Bergman, a retired Marine Corps Lt. Gen., faces ex-state Democratic chairman Lon Johnson in competitive district that includes state’s Upper Peninsula; Republican Rep. Dan Benishek not seeking re-election
    • Cheney, a former State Dept. official whose father is former Vice President Dick Cheney, is strongly favored to win Wyoming’s statewide House district next week
  • NE-02: NRCC released TV ad saying Democratic Rep. Brad Ashford votes too frequently with Minority Leader Nancy Pelosi of California
    • Ashford has broken with the consensus Democratic position on major votes more frequently than most Democrats in the 114th Congress, voting for the Keystone XL pipeline and trade promotion authority and to repeal estate and medical-device taxes
    • Republican Don Bacon, a retired brigadier general, has repeatedly tied Ashford to Pelosi in a mildly Republican-leaning district in and around Omaha
  • PA-16: Democrat Christina Hartman’s campaign released TV ad comparing her background in international affairs to Republican state Sen. Lloyd Smucker’s support of Trump, who is “too dangerous on national security”
    • Smucker began campaign as heavy favorite, though nonpartisan Cook Political Report and Sabato’s Crystal Ball now have race in competitive “leans Republican” category
    • District includes most of Lancaster County and parts of Berks and Chester Counties west of Philadelphia; in 2012 election, Mitt Romney beat Obama 52%-46%
    • Republican Rep. Joe Pitts isn’t seeking re-election
  • TX-23: Democratic ex-Rep. Pete Gallego in TV ad said he’ll “work across the aisle” to increase minimum wage and pass family-leave and pay-equity measures
    • Gallego seeking to unseat Republican Rep. Will Hurd in Hispanic-majority border district linking San Antonio to El Paso
    • Hurd unseated Gallego 50%-48% in 2014
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