Wrap Up

Hey Influence Traders,

Mark Sebastian, Bill Griffo and I had a heck of a show yesterday afternoon. Thanks to all who attended!

Bill dissected recent moves by the Fed.

I discussed the impact of Tuesday’s elections on the markets.

Mark tied it all together and put on some trades to CAPITOL-IZE on those ideas.

If you want to catch the replay, grab the trades and get a month of Mark’s Big Money Flow program all for just $99, give our Customer Care Team a call this morning at 1-888-872-3301.

Election Tuesday

Tuesday saw a referendum on the Biden agenda … and it was not positive for El Presidente.

The marquee race was in Virginia, which saw a clean sweep for the Republicans.

They took the office of governor, lieutenant governor and attorney general, plus the legislature went red.

This will be the first time there is a Republican in the governor’s mansion in 12 years.

It’s particularly impactful since Virginia has been gravitating steadily blue.

New Jersey remained in Democrat hands, but at a 1% spread means the race was close enough to cause concern for the Dems, who were expecting a double-digit win.

In a fun twist, the president of the New Jersey State Senate looks like he might lose to his Republican truck-driver challenger. 

Dem Steve Sweeney is going for a 7th term, but is trailing Republican challenger Edward Durr by a couple of thousand votes.

Durr spent only $153 on his general election campaign, according to campaign finance filing, so a loss would be extra stunning.

Election Impact

Tuesday was a clear repudiation of the Biden agenda.

Biden is personally suffering the lowest approval rating of any president at this stage of the presidency.

The major complaints were that the Dems have been pushing too many social issues and are moving too far left.

They also caught criticism for failing to work together and pass legislation, particularly the bipartisan infrastructure bill which is generally viewed favorably and polls well.

That raises interesting issues for Dems on the Hill

They now know that they are vulnerable in the coming midterms, so do they listen to the people or push forward with their pet programs?

They didn’t take long to answer that question.

The prevailing view of the Dem staffers I’ve spoken to is that they lost because they’ve not done enough to push their agenda.

That means that they are going to press hard on passing their social spending programs.

The Dems are arguing that the best way for them to salvage midterm elections is to unify around their party platform and go all in.

It is also a clear sign of the growing influence of the progressive wing of the party.

They are driving policy and influencing leadership.

Biden seemed unphased by Tuesday’s results, stating that “people want us to get things done … and that’s why I am continuing to push very hard for the Democratic Party to move along and pass my infrastructure bill and my Build Back Better bill.”

The White House believes that Tuesday’s results should add to the urgency of passing the Biden agenda.

Apparently, Speaker Pelosi is on board.

Yesterday morning, in a snub to moderate Senator Joe Manchin, Nancy Pelosi announced that they were putting paid family leave back in the spending bill.

Manchin was not happy, reasserted that the provision is wrong for the spending bill and doubled down on opposing it.

The word on the Hill is that the Dems are going to try and slip more provisions back in.

However, there remains a lot of inter-party disputes, so we are still in a wait-and-see mode.

Word from DC is that Speaker Pelosi is lining up a vote on Biden’s agenda whether or not Manchin is on board.

House leaders are frustrated with Manchin and want to put their foot on the gas instead of the brake on passing the boondoggle bill. 

Regardless of the success in the House, Manchin’s vote is essential for the bill’s passage in the Senate.

In response to Pelosi, Manchin reasserted his opposition, stating that the “unbelievable” Republican victories in Virginia’s statewide races Tuesday validate his concerns about inflation and moving too quickly.

Market Impact

With the Dem push to support passage of the boondoggle bill, green energy remains hot.

On top of that, Biden came back from Scotland and declared a climate win overseas (the rest of the world would disagree, but who’s counting?).

With a green push in the infrastructure and boondoggle bills, pushing EVs will remain a priority —  and that requires lithium.

Andrew Giovinazzi and I have our eyes on Quantumscape Corp. (Ticker: QS).

QS is pioneering solid-state lithium metal batteries.

The go-to batter today is lithium-ion, which has liquid electrolyte as opposed to a solid one.

Solid state batteries have more power capacity and less risk of explosion.

Coal and fossils are still going to run hard – Britain is expecting a “long, cold winter” and is buying a ton of coal from Russia.

Coal use is not slowing down, but there is a move to make it more green.

That is where Direct Air Capture comes in.

It is a technology that siphons carbon from the air, which can then be buried or reused to make fuel, plastics and carbonated soda.

That is why companies from Exxon to Coca-Cola are interested in the technology.

Moreover, under some of Biden’s proposed legislation, coal-fired power plants would be eligible for billions of dollars in tax breaks if they install carbon-capture systems.

Some of the leading carbon capture companies are still privately held.

But Norwegian company Aker Carbon Capture (ADR Ticker: AKCCF) is being added to the CAPITOL GAINS portfolio.

Cutting Through the Noise for You.

Frank

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