Trump’s favorite polling group delivers devastating blow: America likes Joe Biden more

Recent Rasmussen polling shows 48% of Americans believe Joe Biden did a better job in the Oval Office versus 40% for Donald Trump, and 58% say they do not see the “golden age” Trump promised (27% say they do, 15% unsure). The article highlights deteriorating consumer confidence—citing a SSRS/CNN finding that 64% want more done to reduce the cost of living—and political vulnerability on immigration as NBC polling finds 72% favor reform or abolition of ICE and 66% disapprove of its conduct. For investors, weakening consumer sentiment and growing political headwinds increase policy and demand uncertainty ahead of midterms, while Trump’s emphasis on tariffs and manufacturing rhetoric could keep trade- and tariff-related policy risks front of mind for markets.

Analysis

Market structure: A sustained polling advantage for Democrats raises probability of a less aggressive tariff/immigration platform from federal executives and fewer near-term deregulatory wins for Trump-aligned industries. Direct winners: import-reliant retailers (WMT, COST), consumer staples (KO, PG, XLP) and rate-sensitive REITs if risk-off drives yields lower; direct losers: private prison operators (GEO, CXW), border-security vendors and firms whose margins rely on tariffs. Expect 3–9% short-term EBIT swings for importers if tariff rhetoric permanently de-escalates.

Risk assessment: Tail risks include rapid policy flips (tariff surge or mass ICE-authority changes) and violent geopolitical events that reprice safety assets; probability of midterm-driven legislative gridlock remains high, muting big fiscal moves. Immediate (0–3 months): consumer discretionary sales vulnerability as sentiment lags (surveys show >60% concerned about cost-of-living). Short-term (3–9 months): sector rotation around midterms; long-term (9–24 months): structural regulatory shifts if public opinion sustains; watch margin compression thresholds (retailer gross margins moving ±100–200 bps).

Trade implications: Tactical: establish 2–3% long position in XLP and add 1–2% long positions in WMT/COST (expect 5–12% upside on tariff relief within 3–9 months). Defensive: initiate 2–3% short positions in GEO and CXW—target 20–40% downside if ICE reform momentum continues; use stop-loss at 15% adverse move. Options: buy 3–6 month put spread on XLY (short 5–10% OTM, long 12–20% OTM) sized to limit max loss to 0.5–1% of portfolio and buy 3–6 month calls on WMT/COST 5–10% OTM for asymmetric upside.

Contrarian angles: The market may overprice persistent anti-Trump outcomes; polling is noisy—if GOP regains messaging on economy then tariffs could return, benefiting industrials and hurting retailers, producing a sharp mean-reversion. Historical parallels (2010/2018 midterm rebounds) show rapid sentiment flips can produce 10–20% sector reversals inside 2–3 months. Unintended consequence: aggressive shorting of GEO/CXW is crowded—use options or pair trades (short GEO vs long GLPI or long XLP) to reduce idiosyncratic risk.

Key Decisions for Investors

• Establish a 2–3% portfolio long in XLP (consumer staples ETF) and add 1–2% long positions in WMT and COST, targeting a 5–12% upside over 3–9 months if tariff rhetoric subsides; trim at +10–12% or if 10y Treasury yield rises >50bps.
• Initiate 2–3% combined short exposure to GEO (GEO Group) and CXW (CoreCivic) using equity or buy-write collars, sizing for potential 20–40% downside over 6–12 months; cut losses at a 15% adverse move and reduce if ICE reform legislation fails to gain traction in next 90 days.
• Buy a 3–6 month put spread on XLY (short ~5–10% OTM, long ~12–20% OTM) sized to cost 0.5–1% of portfolio to hedge consumer-discretionary downside from weak sentiment ahead of midterms; roll or unwind if XLY falls >8% or midterm polling volatility subsides.
• Deploy a 1–2% tactical long in TLT (long-duration Treasuries) for 0–3 months as a hedge against political risk-driven flight-to-quality; exit if the 10y yield rises >40bps from entry or if clear pro-growth fiscal policy is signaled post-midterms.