“We’re still optimistic based on his unbelievable progress”, Mark Meadows said Monday, during remarks to Fox News.
He was, of course, referring to Donald Trump who, according to CNN, “demanded” to return to The White House on Sunday. People familiar with the situation said Trump was concerned his stay at Walter Reed made him look weak in the public’s eyes. That directly contradicts what Trump himself said in a video message over the weekend, when he insisted that staying holed up in the bedroom at 1600 Penn. would make him seem ineffectual.
Meadows went on to praise Trump’s strength in the fight against the virus. To be sure, Meadows was just doing his job ahead of an announcement on the president’s discharge, but his comments nevertheless conjured comparisons to authoritarian propaganda. Later, Trump returned to The White House, took off his mask, and posed for pictures.
Meanwhile, Kayleigh McEnany is positive.
“After testing negative consistently, including every day since Thursday, I tested positive for COVID-19 on Monday morning while experiencing no symptoms”, she said, in a statement.
In an effort to get out ahead of what are sure to be accusations from the media, McEnany proceeded to insist that she did not knowingly endanger members of the press. “I definitively had no knowledge of Hope Hicks’ diagnosis prior to holding a White House press briefing on Thursday”, she said.
In addition to having a “the lady doth protest too much, methinks” feel to it, McEnany’s statement inadvertently supplied the press with questions.
Obviously, this is a train wreck and social media wasn’t shy about posting looped animations to that effect. Mike Pence is still negative as far as everyone knows, but this situation has an inescapable “next shoe to drop” feel to it.
It is not a stretch (at all) to suggest that Monday’s price action across both equities and rates was indicative of the market pricing out a contested election outcome. That’s just another way of saying both stocks and bonds are pricing out Donald Trump.
30-year yields jumped the most in a month, steepening the 5s30s in the process.
While some of the back-up at the long-end was attributable to Trump’s weekend remarks about fiscal stimulus, expectations of a Democratic sweep are fuel on the fire. That is: If there’s any outcome the market believes would surely lead to more stimulus, it’s a Democratic sweep.
So, if Trump is pressing for more stimulus, and his odds of being reelected are falling, that means you’re likely to get more stimulus either way. That’s bearish for the very long-end as investors will expect more supply and wider deficits.
30-year yields are now right at their 200-day moving average, a level not breached since March of 2019 on a quick glance.
This comes as shorts in long-bond futures were extended, while bullish positions in the 10-year hit three-year highs.
One way to explain the juxtaposition is simply by pointing to higher odds for bigger deficits, more spending, and reflation. That kind of outcome is most likely under a Democratic sweep.
As Bloomberg’s Edward Bolingbroke notes, supply was a factor on Monday too, “as IG credit offerings, some with 10- and 30-year tranches, line up [while] Treasury plans for 10- and 30-year reopenings this week”.
Still, the message from markets into the US afternoon Monday could plausibly be construed as one in which traders now view the odds of a contested election outcome as having moved materially lower.
Or, put differently, the market seems to think that recent events are making Trump’s reelection bid (and Republicans’ chances of holding the Senate) increasingly tenuous.