Stocks Face Impending “October Surprise” – Prepare Now!

My weekly column in Banyan Edge rarely covers politics, as you may have noticed.

Instead, I prefer to stay laser-focused on money and markets (hence the name of my publication). I’m here to pinpoint potentially life-changing investments that no one else is reporting on.

If I can share even ONE great investment that helps make you money, that’s worth more than all the talking heads, political punditry and stale headlines you’ll find elsewhere.

At the same time, it’s the government that prints our money and drives our markets.

Government spending makes up over 36% of America’s total economic activity.

And next week’s debate is going to be a critical turning point for the future of our government.

Because for the first time, former President Donald Trump will meet and discuss with Vice President Kamala Harris on the world stage.

The last debate on June 27 saw a historically disastrous performance from sitting President Joe Biden, who subsequently withdrew from the race — leaving Vice President Harris with just 100 days to make her case to American voters.

Harris and Trump have vastly different agendas and vastly different visions for the future of our country.

The winner of November’s contest will guide trillions in government spending for years to come.

So even though we’re not covering up-to-the-minute polling or campaign news, we’re still paying very close attention to how the race is developing — and the impact it could have on your portfolio.

Here’s what you can expect during (and after) Tuesday’s debate and why it may lead to an unexpected “October Surprise” for investors…

The ONLY Issue that Matters to Voters

James Carville, aka “The Raging Cajun,” played a key role in helping Bill Clinton win the election.

And Carville has always attributed that success to a single phrase that became the motto of the campaign. He had it tacked up on his wall in the campaign headquarters:

“the economy, stupid…”

At the time, America was in the midst of a recession. And Clinton was running against an incumbent who had an early advantage.

Instead of trying to tackle every one of America’s countless problems, Carville focused the campaign on one issue: the economy.

His message was so simple, so focused and so persistent that it broke through to Americans everywhere.

Over the course of a few months, the phrase became the campaign’s mantra. “It’s the economy, stupid” was its tongue-in-cheek rallying cry.

And it worked.

George H.W. Bush went from an approval rating of 90% in March 1991 to a disapproval rating of 64% by August 1992.

Thanks in large part to Carville’s aggressive messaging, voters trusted Clinton to take care of their everyday needs. And so, on that fateful day in November 1992, they made Bush a one-term president.

Fast-forward to today, and we’re in a similar situation…

Harris Pulls a Reversal on the Economy

Going in to the first debate against Biden, Trump had a clear advantage on the economy.

Voters clearly blamed Biden for inflation, and his campaign’s clever catchphrases like “Bidenomics” never really broke through like the “I did that” stickers posted on gas pumps next to rising prices.

But voters seem to be changing their minds for Harris and Walz…

Trump’s once-substantial lead on the economy has shrunk to just a few points.

And now that inflation seems to be declining (with the Federal Reserve on track to slash rates), Americans seem less anxious about rising prices and government spending.

Meanwhile, the Trump campaign is taking a page from Carville’s playbook and focusing squarely on hot-button economic issues…

At a campaign stop in Las Vegas, Trump announced plans to potentially do away with taxes on all tipped income. That kind of policy could make him an instant choice for millions of service industry workers looking for a windfall.

Trump has also proposed eliminating the federal income tax and replacing it with a 10% tariff on imported goods and establishing a strategic bitcoin reserve.

Will September’s Debate Lead to an October Surprise?

The lines here are clearly drawn…

Since Kamala Harris took over the Democratic ticket, she’s recovered the interest of key swing voters in polling and drawn the race to a dead heat.

Over 51 million Americans watched the last debate. And since this will be the first time Harris squares off with Trump in person, we can expect even more viewers to tune in this time around.

So who will win?

Well, Trump is Trump. He’s one of the biggest celebrities in modern history and a master entertainer on any stage.

Meanwhile, Harris is a former Attorney General with a long history of successful debates that most Americans don’t yet know about.

In the past, Trump’s strongest debate performances have involved putting his opponents on the defensive. Harris won’t make that easy, so this should be a close one with plenty of tit-for-tat.

But regardless of which candidate wins on Tuesday, investors are in for an “October Surprise” like none we’ve ever seen before.

Don’t worry, this is the good kind of surprise.

Because this October will be an outstanding month for the stock market as investors race to stay ahead of the election and cash in on the best breakout investments of a new administration.

I’ll share more specifics in the coming weeks.

But in the meantime, make sure you tune in and enjoy the show on Tuesday.

To good profits,

Adam O’Dell

Chief Investment Strategist, Money & Markets