The GOP keeping Florida, Trump undermining the judicial process and no clean sweep for Team Biden. The US election has by normal standard had its fair share of drama, but by Trump standards, this is fairly tame. That being said – the result looks as though it’ll come down to the wire, with Rust Belt states looking to decide who will be the next ‘most powerful man on the planet’.
These states – Wisconsin, North Carolina, Pennsylvania, and Georgia – were overall favouring Trump in the 2016 election, but with three so far demonstrating voter swings of over 1% towards the Democrat camp, the race is certainly still on, with the result possibly being decided by prolonged vote-counting.
At present, the three latter rust belt states remain in Trump’s favour, though the likely Democrat-favouring absentee and mail-in ballots have just begun to be counted. Similarly, with over 95% of the vote counted in Wisconsin, Biden currently pulls out a narrow lead:
BREAKING Biden takes the lead in Wisconsin:
Biden 1,551,268 49.29%
Trump 1,549,127 49.22%
3,147,142 votes counted. Estimated >95% in
— Political Polls (@Politics_Polls) November 4, 2020
We shouldn’t ignore other states though. While Arizona is currently trending towards the Democrats, we can see Trump staging something of a comeback in Nevada, with data trackers calling overall margins ‘razor thin’.
The effects these developments have had on markets are anything but positive. Currently holding their breath, having recovered from sharp dips at the start of trading, Euozone equities remain on shaky legs, all fluctuating down, then up and then back to neutral in the last two or so hours.
Speaking on the current state of play with the election, and its effect on market projections, Kingswood CIO, Rupert Thompson, said:
“The worst outcome for the markets had generally been expected to be a close and contested election and this seems to be what we are now headed for. Certainly, if Biden does manage to pull a rabbit out of the hat, Trump will contest the result and we face weeks of uncertainty.”
“Longer term, the main impact is that there is now no prospect of the big fiscal stimulus which was on the cards if there had been a Democratic clean sweep. Still, with infections climbing quite rapidly in the US and likely to force renewed social distancing measures which will hit the economic recovery, a rather smaller stimulus should eventually be agreed.”
“All said and done, the events of the last 24 hours do not justify any major change in our longer term views for markets. We continue to believe equities should see further upside next year as the virus is slowly brought under control.”