While some recent polls have President Donald Trump’s approval rating sinking and several top Democratic candidates leading him in head-to-head 2020 matchups, more than two-thirds of North American chief financial officers surveyed by CNBC see a Trump reelection.
About a quarter of them say former Vice President Joe Biden will win, according to results from the latest CNBC Global CFO Council Survey, conducted between Aug. 21 and Sept. 3, for the third quarter of 2019.
CNBC’s Global CFO Council consists of a number of the largest public and private companies in the world, managing more than $5 trillion in market value across a number of sectors.
Trump’s approval numbers have taken a beating of late as fears of a recession rise higher the longer the trade war with China goes on. Quinnipiac University, CNN/RSS (of course) and Washington Post-ABC News polls all have shown a drop in Trump’s approval, which has caught the attention of Wall Street.
FiveThirtyEight’s composite model of all polls shows Trump’s approval at 41.6% and his disapproval at 53.8%, which is about where it’s been his entire time in office.
JPMORGAN: cites recent poll numbers showing Trump is under pressure on trade, adds that a recession would be “politically devastating” — and says, as a result, we could see “real progress” with China and “a more sustained rally.” pic.twitter.com/iTlPbnOFoA
— Carl Quintanilla (@carlquintanilla) September 10, 2019
CNBC’s survey shows Trump’s trade policies, particularly regarding China, have been a headwind for the incumbent.
A majority of respondents say current trade policy is bad for business over the next six months and almost half say their companies are experiencing higher costs as a result of tariffs, and more than a quarter say they’ve increased prices for American consumers to offset the higher costs.
However, the CFO survey also shows that the trade war isn’t scaring enough people into believing there will be a recession.
About 65% of respondents say we won’t hit a recession snag in 2020, even though they do not believe, as Trump does, the Federal Reserve should be cutting interest rates while the economy is strong. In fact, a majority of CFOs see current interest rates as “appropriate.”
A recent JPMorgan report put the odds of recession in the next year at about 40%, noting a global economic slowdown and a number of inverted yield curves in the U.S. bond market. In addition, tight labor markets, shrinking business profit margins and high corporate debt are all weaknesses that are “ample, but not glaring.”
The survey noted three regions where the CFOs described conditions as on the decline: China, the EU and the U.K. Britain has been on the decline for three straight quarters while the Euro zone and China fell from “Stable” in Q2 to declining in Q3.
The U.S., on the other hand, when from “improving” in Q2 to “stable” in Q3.