Early numbers bode well for Democrats
The US presidential election is already here. According to the US Elections Project, 28.7 million Americans have voted in over 40 states, with 55% of the absentee ballots coming from Democrats and 24% from Republicans.
19th October 2020
While the early numbers appear to be good news for Democrats, it seems that many Republicans were planning to vote in-person on election day. An ABC News/Washington Post Poll taken on October 11 showed that 63% of Democrats and 35% of Republicans planned to vote early. This election is widely expected to deliver a strong turnout and should easily exceed the 2016 presidential tally of 138.8 million Americans. Both bases are extremely motivated, so it should not be a surprise if voter turnout breaks all the records and tops 150 million votes.
President Trump’s last campaign push is also including some once-impenetrable red states. Trump appears to have taken notes from Former United States Secretary of State Hillary Clinton’s 2016 campaign mistakes. Clinton’s campaign made a couple tactical errors, with the biggest being the lack of campaigning with blue wall states. Clinton’s famed mistake was the decision to decline a visit to Wisconsin. President Trump’s appearance in Georgia shows he is not taking any chances losing red states that over the past few elections have not come close to wavering.
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The American people never got to see the second presidential debate, but instead saw two competing townhalls. Not much was achieved in both townhalls, with the exception that former-VP Joe Biden signaled he would potentially be open to making changes to the Supreme Court. Biden stated that he will “make clear” his position on adding justices to the Supreme Court after the Senate votes on nomination of Judge Amy Coney Barrett.
The final presidential debate will focus on "Fighting COVID-19", "American Families", "Race in America", "Climate Change", "National Security" and "Leadership". Trump campaign senior adviser Jason Miller expects the President to take a less combative position against Democratic presidential nominee Joe Biden. The first debate was a train wreck that will most likely not be repeated. President Trump took a hit in the polls after the first debate and will likely ease away from the bulldozing strategy.
Wall Street prepares
Wall Street appears to be preparing for a blue wave. Many of the ultra-rich have been rushing to transfer wealth in preparation for higher estate taxes and dismantling of tax-free pass down programmes. While the paperwork is getting finalised, funds will not likely move until a clear outcome has occurred. The risk of a ‘blue wave’ could mean higher taxes and tougher regulation, but that would be countered with a massive stimulus spending. Wall Street also seems to be growing confident that the results might not take as long as initially feared, with some expecting the worst-case scenario for getting an outcome being early December. Stock market volatility will remain elevated as the result for the presidency and the Senate need to be finalised before any macro strategies can be applied.
Democratic presidential nominee Biden still holds onto a strong lead in 10 of 12 swing states. President Trump has made some progress in polls from Ohio and Texas, but many of the deficits are significantly greater than what he had to overcome against Hillary Clinton in 2016.
Two important numbers continuing to go in the wrong direction for President Trump are the number of coronavirus cases and hospitalisations. For some Americans, this election is a referendum on Trump’s handling of the coronavirus and right now cases are surging across the Midwest. Some health experts are very concerned that the biggest wave of the coronavirus could happen over the next couple weeks, which could coincide when people go to cast their ballots.
The fall surge may already be here, and the impact could be disastrous for in-person voting. Only two states posted downward trends by at least 10% with new coronavirus cases, while 10 states reported their largest highest single-day virus case tally last week. Polling sites need enough volunteers to staff, and with many of the traditional volunteers being especially older people, some sites may have to shutter. The election will go on as planned despite any surges of the coronavirus.
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Senior Market Analyst, The Americas, OANDA
Ed has over two decades of financial market experience and began his career on Wall Street as a forex broker. Ed has worked with some of the top research and news departments in New York and frequently appears on CNBC, Bloomberg TV, Yahoo Finance Live, Fox Business, AusbizTV, and Sky News.