Investors should steer clear of trades favoring Kamala Harris as the upcoming presidential election is “Trump’s to lose,” according to strategists at Alpine Macro.
In a Thursday report, strategists note that Harris’s entry into the presidential race has energized the Democratic base, reinvigorating supporters disillusioned by Biden’s candidacy. Although she has yet to be officially nominated at the Democratic National Convention in Chicago, Harris has effectively secured the nomination with the backing of most Democratic delegates.
However, the strategists caution that Harris’s surge in the polls “may be nearing its high watermark.”
“While the race is certainly competitive, Trump’s campaign is arguably more resilient than it looks,” they added.
Alpine highlights that Trump’s support, particularly in swing states, remains robust, suggesting a “structural improvement in his support level” compared to previous elections.
The report outlines several other reasons why this race is Trump’s to lose.
Primarily, strategists emphasize that Harris’s appeal appears limited to the Democratic base, with little evidence of traction among centrist voters, who are crucial in swing states. While the current Vice President has successfully consolidated left-wing support, Alpine Macro warns that this could come at the expense of broader appeal, particularly among moderates and undecided voters.
Furthermore, the strategists note that the Trump campaign has strategically refrained from launching aggressive attacks against Harris, potentially waiting for the Democratic platform to be fully defined before intensifying their campaign.
“As we previously wrote, Harris is a vulnerable candidate despite recent positive media coverage,” strategists noted.
“She is effectively running on Biden’s record, which remains unpopular. Democrats, and Harris as VP, also have a credibility issue, being seen by voters as having covered up for Biden’s mental deterioration.”
More importantly, Alpine Macro points out that Harris is positioned to the left of Biden on policy matters, which may attract criticism for being outside the U.S. political mainstream. They note that her tenure as a Senator and Attorney General could come under scrutiny.
Also, Harris is not known for being a compelling speaker, strategists argue, though she might defy expectations in this area. Her debate performance against Trump, tentatively scheduled for September 10, could be pivotal.
Ultimately, Alpine Macro maintains that the fundamentals still favor Trump, and they caution against making trades based on Harris’s current polling strength.
While the race is considered close, strategists believe that Trump still has an edge, adding that Harris’s recent rise in the polls “is somewhat of a “sugar rush”.”
