- A batch of polls conducted after the dust settled from party conventions show Biden enlarging his lead.
- President Trump may push for a larger fiscal package to increase his chances.
- Markets have room to rise after the recent downward correction.
"It's the economy stupid" – that comment around Clinton's 1992 election campaign is where President Donald Trump is hoping to beat challenger Joe Biden. Republicans have been reluctant to support another generous package – and even reduced their offers to below $1 trillion – after the encouraging jobs report.
August's Non-Farm Payrolls statistics showed the unemployment rate sharply fell to 8.4% – far better than expected. However, they may change their calculous after looking at recent worrying polls for their standard-bearer.
Providing more stimulus could win votes and help Trump be seen as capable on handling the economy. He is far behind on two other issues that matter to Americans – handling of the virus and race relations. Despite touting "Law and Order," polls have shown that voters trust Biden to provide calm rather than Trump.
Moreover, the president reportedly called described dead soldiers as "losers" and "suckers" – a message that is incompatible with supporting the military nor the police.
Boosting the economy could distract attention from these topics – and also shore up equities, which have been correcting. The president partially measures his success on the performance of stock indexes.
Trump trails in battlegrounds
Raven Pack's election monitor shows Biden is set to flip five states from Democrat to Republican" Pennsylvania, Michigan, Wisconsin, Florida, and the latest to switch its preference is North Carolina. That would give Biden a 108 electoral vote win – higher than Trump's margin in 2016.
Nate Silver's FiveThirtyEight is showing Biden has a 74% chance of winning, up from 71% when the model was launched in early August. That means Trump received no convention bounce. The latest push toward the Democrat came from an NBC poll showing a nine-point lead for Biden in Pennsylvania, a key battleground state that Trump carried in 2016.
Source: FiveThirtyEight
RealClearPolitics is pointing to a Biden lead of 7.1% in national polls, mostly unchanged from several weeks ago. The RCP Average does not include the latest Ipsos poll pointing to a 12-point gap.
Source: RealClearPolitics
The Economist's model is showing sliding chances for a Biden victory – but he still has a broad 83% probability of replacing Trump at the White House according to the magazine's model.
Source: The Economist
Conclusion
Markets tend to prefer full Republican control of Congress and the White House – allowing for deregulation and lower taxes. However, there is still time ahead of the elections. Currently, investors are concerned about the lack of emergency federal help – most of that lapsed at the end of July.
With diminishing chances of re-election – and perhaps a delay in obtaining a coronavirus vaccine – the president may now opt to push his fellow Republican fiscal hawks toward compromising with Democrats and boosting the economy. That may boost stocks, at least in the short term.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
GBP/USD holds steady above mid-1.2700s after UK exit polls point to Labour victory
GBP/USD consolidates in a range just above mid-1.2700s during the Asian session on Friday after exit polls suggested that Britain’s main opposition Labour Party was set to win a massive majority in the UK general election. The outcome sets the stage for a rate cut by the Bank of England in August and acts as a headwind for the British Pound.
AUD/USD bulls take a brief pause near multi-month peak ahead of US NFP
AUD/USD consolidates near a multi-month peak during the Asian session on Friday as traders keenly await the release of the US NFP report. In the meantime, expectations of interest rate cuts by the Federal Reserve undermine the US Dollar and act as a tailwind for the pair amid bets for a rate hike by the Reserve Bank of Australia.
Gold price consolidates amid choppy trading ahead US NFP
Gold price edge up 0.15% amid thin trading on US Independence Day. XAU/USD reached a two-week high of $2,365 Wednesday, driven by weak US jobs data and heightened Fed rate cut expectations. Traders shift focus to Friday's NFP report.
Is the party over for meme coins?
According to Santiment's data on Thursday, meme coins have experienced steep declines in the past few weeks, following speculation that the crypto market has passed its euphoria phase.
Labour wins a landslide, as Pound is unconcerned by Starmer government
What a difference five years makes, Labour have turned themselves around and are on course to win 410 seats and a 170-seat majority, according to the exit polls conducted by the main UK broadcasters.