Crunch time with the first presidential debate in a few hours

Abraham George Macro View

The big news over the weekend was that the POTUS has not paid any taxes for years. For the years in 2016 and 2017 president Trump paid only $750. His ardent supporters must be thinking, “How did he manage to do that? He must be really a smart guy!” His non-supporters are thinking, “What a sleeze ball? He doesn’t even pay the taxes of a minimum wage earner.”

The point is Trump has portrayed himself to the public as a very rich and successful man but to the IRS he has painted himself as a loser. The dispute is between being fair and being legal. What may count at the ballot boxes will be if he was fair.

It is not as easy as that. In a few hours the big fight for the election starts with the president and his opponent Joe Biden as they will be teeing off in the first of their three major debates.

This could be one of the most interesting broadcasts in the history of television. Back in 2016 about 84 million people tuned into the first Clinton/Trump debate. That was a record for presidential debates. The upcoming debate in the day should beat that record.

The biggest recorded viewership for television was when we used to have Muhammad Ali fights in boxing when it went up to a billion or more. Given the global consequences of this election, think this debate should match those numbers.

As for the markets the view in 2016 was that the market will crash if Trump won the election. But for 2020 the view is that the market will crash if Trump didn’t win. So it is all conjecture.

Equities

The S&P 500 futures rallied to 3363 on Monday. This corrective up move from Sep 24 should be completing or must have completed the counter trend move in this down move. A move below 3198 the low of Sep 24 should confirm that the impulse move down is underway.

Bonds

Bonds have been trading sideways but think they are nearing a point where another down move can start soon. It is important that Bonds stay under 178^17.

Euro

Euro made a strong rally from its lows of 1.1612 on Sep 25. It should find resistance at current levels of 1.1750 or maximum 1.1775 to 1.1800. A close above the resistance level will be very bad for the negative outlook on Euro.

Gold

As outlined in the prior reports gold found strong support in 1825 to 1850 area. If the current price action develops further it has potential to rise above its previous highs of 2072 on Aug 7. There is short term resistance in the 1915 to 1925 region. A decline below 1765 will invalidate the upside potential.

Abraham George is a seasoned investment manager with more than 40 years of experience in trading & investment and portfolio management spanning diverse environments like banks (HSBC, ADCB), sovereign wealth fund (ADIA), a royal family office and a hedge fund.