Charlotte Street Partners



Trumped in Texas?

Written by Adam Shaw, associate partner
Edited by Kevin Pringle, partner
3 November 2020

Good morning,

Little better reminds us that the United States of America is as its name suggests – a union of individual, autonomous states – more than a presidential election.
As we learned all too well in 2016, and 2000 before that, presidents are not elected on the basis of a popular vote but the electoral college system, in which states are all powerful.
Polls open in less than three hours (although voting has been underway for several weeks) as the US decides whether to give President Trump four more years or revert to a more tried and tested path under Joe Biden.
All eyes will be on Pennsylvania in the early hours of tomorrow morning. Yesterday’s Financial Times Big Read (£) looks at why in detail but, in short, it’s large numbers of white, working-class voters and blend of urban and rural populations has long made it a bellwether.
Its nickname, the Keystone State, is ironic since it was the loss of Pennsylvania that saw the Democrats’ ‘blue wall’ crumble and Trump’s victory in 2016.
This time around, most pollsters see it as the ‘tipping point’ state which, if won by the Democrats, would all but shut off Trump’s road to a second term and see Biden become the 46th US president.
However, I want to take a look further south, to somewhere not usually in the mix.
Texas has long been a Republican bastion. As the second most populous state, it has proven a reliable counter-balance to liberal California in presidential elections over the past four decades.
Might that be about to change, though?
Total turnout in Texas has already exceeded that of 2016, boosted by 1.8 million new registered voters, and the state’s changing demographics – an increasingly diverse electorate and growth in the urban population – has seen it become competitive, politically.
According to the latest polls, Trump and Biden are neck and neck and the state’s 38 electoral college votes are firmly up for grabs.
Trump’s re-election strategy has been clear for a number of months now: call the credibility of postal voting into doubt, undermine faith in the system, and secure victory in the Supreme Court on a legal technicality.
However, if the Lone Star state turns blue, the lawyers both parties have on standby most likely wouldn’t even need to open their briefcases.


Police in Austria are conducting a manhunt after a multiple gun attack left four people dead in Vienna. About a dozen people were wounded after gunmen opened fire at six different locations in the city centre on Monday evening, with one suspect shot dead by police.
The entire population of Liverpool – nearly half a million people – is set to be tested for Covid-19 under the UK government’s first city-wide attempt to test and track every case of the virus. Under the plan, the self-isolation period for those who test positive and their contacts would be reduced from the current 14-day period to seven days. Liverpool is currently one the UK’s worst-hit areas, with weekly Covid-19 cases of 410 in every 100,000.
Bloomberg has reported that UK and EU officials are on the verge of reaching a compromise on fisheries, one of the biggest obstacles to a post-Brexit deal. According to the report, quotas would be set to the principle of zonal attachment, under which the percentage of shared stocks are based on exclusive economic zones (EEZ). This is a key UK demand and one that would allow the British government to claim it has won back control of its seas.

Business and economy

Self-employed workers will be able to claim government support of 80% of trading profits, up from the current level of 40%, during the month-long lockdown in England. Under the latest instalment of the UK-wide Self-Employment Income Support Scheme (SEISS), self-employed workers will receive 80% of their average trading profits for November. According to the Treasury, SEISS is calculated over three months, so this increases the total grant from 40% to 55% of trading profits for November to January and the maximum grant increases to £5,160.
Customers are waiting for more than £1bn in refunds due to package holidays being cancelled because of coronavirus, according to Which?. Around 9.4 million people have had a package holiday cancelled since the UK’s first lockdown in March and, of those who requested a refund, 21% were still waiting at the beginning of October. More than four out of 10 people said they had waited longer than a month for their refund, and the average cost of a cancelled holiday was £1,784, the research found.
Economists have slashed growth forecasts and highlighted the prospect of a double-dip recession in the UK in the face of a second national lockdown. The National Institute of Economic and Social Research expects GDP to shrink by 3.3% in the fourth quarter, having previously predicted of growth of 1.5%. Goldman Sachs, Morgan Stanley, Credit Suisse and Oxford Economics have also downgraded their outlooks.

Columns of note

Writing in The TelegraphWilliam Hague looks at the scramble diplomatic services across the world will undertake to ensure their head of government is the first to receive a call or invitation to visit from Joe Biden in the event he is elected president. The UK, he says, suffers particular angst in this area due to the importance we attach to the “special relationship”. However, Hague argues that, while Biden and Johnson are likely to hold similar views on global issues, Biden will want to show he is different from Trump and this will manifest itself in prioritising France and Germany in the first instance. (£)
In the Financial TimesHenry Mance argues it is not too soon to judge Boris Johnson’s performance during the Covid-19 pandemic and that the prime minister can have no complaints about being held to account for his failings. Mance asserts that, while Johnson may get lucky with Brexit, when it comes to the pandemic he has made the same mistakes twice and seems unlikely to remain in office beyond 2024. (£)

Cartoon source: The Times


What happened yesterday?

Wall Street recovered some of the ground lost last week as investors anticipate the increase in infrastructure spending that is expected to follow a Joe Biden victory in the US election.
The S&P 500 was up 1.23% to 3,310.24, the Dow Jones Industrial Average rose 1.6% to 26,925.05, and the Nasdaq increased 0.42% to 10,957.61.
In London, the FTSE 100 ended the session up 1.39% at 5,654.97; however, the FTSE 250 dropped 0.2% to 17,180.52. This was amid a mixed picture, with better-than-expected manufacturing data and reports that a deal between the UK and EU on the future relationship is close, counter-balanced by fears over a second national lockdown and lingering uncertainty over the result of the US election.
Ocado was the day’s strongest performer on the main index, climbing 8.04% as the company increased its guidance for annual earnings from more than £40m to more than £60m.
The online supermarket also agreed to buy Kindred Systems, a piece-picking robotics company, for about $262m and robotic arm designer Haddington Dynamics for $25m.
Fellow grocers Sainsbury’s, Tesco and Morrisons also saw gains, rising 2.78%, 2.38% and 0.34% respectively.
JD Sports was the biggest faller, shedding 6.77% as it prepared to shut its stores again.
GVC, the owners of Ladbrokes, was also down, losing 3.44% after warning that core earnings could fall by £43m due to coronavirus restrictions imposed on its European shops.
On the currency markets, the pound fell 0.19% against the dollar to $1.2917, and was down 0.05% against the euro to €1.1099.

What’s happening today?

AB Foods, Cap-xx, Up Global

Kcr Residential

Alcentra Gbp

Cathay Intl Ld

UK economic announcements
(09:30) PMI Manufacturing

Int. economic announcements
(07:00) Industrial Production (GER)
(20:30) Auto Sales (US)

Source: Financial Times

did you know

Although Donald Trump is listed as the 45th US president, only 44 men have held the office. Grosvenor Cleveland won two non-consecutive terms, serving for the first time between 1885-1889, and again from 1893-1897. He is therefore listed as the 22nd and 24th US president.

Parliamentary highlights

House of Commons

Oral questions: Justice (including topical questions)
Urgent questions
To ask the chancellor of the exchequer if he will make a statement on economic support available to individuals and businesses during and after the recently announced lockdown – Anneliese Dodds
To ask the secretary of state for foreign, commonwealth and development affairs if he will make a statement on Nazanin Zaghari-Ratcliffe – Tulip Siddiq
Ten minute rule motion: Food labelling (environmental sustainability) – Chris Grayling
Legislation: Overseas Operations (Service Personnel and Veterans) Bill: remaining stages

House of Lords 

Oral questions
Integrated review of security, defence, development and foreign policy – Lord Howell of Guildford
Rationalising set standards for qualifications to ensure they are of value to individuals and employers – Lord Haskel
Reviewing the contents of the Life in the UK test – Baroness Bakewell
Assessment of the statement by West Midlands police and crime commissioner that police will investigate breaches at Christmas of restrictions in place to address the COVID-19 pandemic – Lord Scriven
Private notice question: COVID-19: public worship – Lord Moylan
Legislation: Prisoners (Disclosure of Information About Victims) Bill – consideration of
Commons reason – Baroness Scott of Bybrook
Statement: Covid-19 update – Baroness Evans of Bowes Park

Scottish Parliament 

Topical questions
Ministerial statement: BiFAB
Ministerial statement: Fireworks
Ministerial statement: Winter preparedness in social care
Culture, Tourism, Europe and External Affairs Committee debate: Arts funding

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