Don’t count Trump out, but adviser pundits make Biden favorite to win

Trend lines look bad for President Donald Trump with less than a week to go before the election.

Hes trailing Democratic presidential nominee Joe Biden by significant margins in most national and battleground state polls. Coronavirus cases are spiking again, while the prospects for a pandemic stimulus package in Congress have faded.

But dont count Trump out, said Greg Valliere, chief U.S. policy strategist at AGF Investments.

You underestimate Donald Trump at your own peril, Valliere said on Tuesday at the virtual Schwab IMPACT conference. He has phenomenal energy.

In 2016, Trump stunned Valliere and most other election analysts, who had predicted a victory for Democratic presidential nominee Hillary Clinton.

But this election differs from four years ago, Valliere said. This time, Trump is trailing Biden significantly in fundraising, facing a huge gender gap with female voters and losing support among seniors. Even more damaging is the unrelenting coronavirus pandemic.

Biden has the edge in what will likely be a close race, Valliere said. The candidate who attains 270 or more votes in the Electoral College will win the election.

I make [Biden] the favorite to get about 300 electoral votes, Valliere said. Thats hardly a landslide but it should be a very narrow victory.

Brian Gardner, chief Washington policy strategist at Stifel, also is predicting Biden will prevail by a slim electoral vote margin. He said Biden is polling better at this point in the race than Clinton was in 2016.

If poll performance is similar to four years ago, Biden probably wins, but its going to be close, Gardner told reporters recently.

One potential vulnerability for Biden as the race comes to a close is his tax plan, Valliere said. Biden is proposing to raise income taxes on people making more than $400,000 and boost capital gains taxes to ordinary rates for people who earn more than $1 million. He also backs raising estate and corporate taxes.

Bidens tax proposals would boost federal revenue by about $2.4 trillion over the next decade, according to the Tax Policy Center.

Ive not seen a politician in my career be successful by saying, Vote for me, Im going to raise your taxes,” Valliere said. “That, to me, is not a real seductive prescription. In this last week, Trump may emphasize that a lot.

Even if he tries to raise Bidens negatives, Trump is the incumbent with a record to defend. This election is going to be a referendum on Trump, Valliere said.

One question thats gaining urgency is when the outcome will be decided. With tens of millions of Americans voting by mail, its not likely all ballots will be counted by late in the evening next Tuesday. Trump has indicated he will contest mail-in votes.

Gardner uses the probability spectrum for nuclear war as an analogy for an uncertain election. DEFCON 5 would mean that the results wont be known for a couple days. DEFCON 1 would mean the outcome is determined by the House of Representatives.

Each level of DEFCON gets more and more remote, Gardner said.

[More: How a Biden win in November reshapes investment advice rules]

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