US presidential elections: what does another Biden vs Trump race mean for the markets?

on Apr 11, 2024
  • All looks set for Biden and Trump to face off again in another presidential election come November.
  • But what does that mean for markets?
  • We look at who's leading the latest polls, and what that might mean for financial markets in months to come.

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For the first time in over 50 years, the same two men will face off in the United States elections, for the second time, for the grand prize of becoming the next president of America.

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It’s a race that, last time, ended in an uprising of angry Republican Trump supporters storming the Capitol building after the announcement of the Democrats’ victory.

Both men have been mired in controversy – President Joe Biden for his age and whether or not he is fit for office on grounds of dementia, and former president Donald Trump for his upcoming criminal trial, among other things.

What are the upcoming milestone dates in the US presidential elections?

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Despite November still being a while away, the main Democrat and Republican candidates have basically been confirmed as Biden and Trump, which means much of what is to come consists around debates, formalities and then, of course, the actual voting.

·        15th to 18th July – The date of the Republican National Convention, at which the Republican party officially names its two candidates of choice for the president and vice president of America. This is usually a grand affair involving a pageant and will be hosted at Fiserv Forum in Milwaukee for 2024’s election.  

  • 19th to 22nd August – The date of the Democratic National Convention, similar to the Republicans’ convention held the month before (the current ruling party traditionally goes second). This year it will be held in Chicago’s United Center.
  • 16th September – The start date of the portion of the presidential election debate, part of the election process. Here, each party’s presidential candidate speaks for 90 minutes on their stances on important issues and policies, giving voters and investors vital clues as to how these would be handled by the party and candidate should they win.
  • 5th November – To the polls! From this day, American citizens will cast their votes at ballot stations or via mail
  • 17th December – Each state’s electors will vote for their preferred candidate, largely based on popular votes. These votes will arrive at the President of the Senate for counting by Christmas Day.
  • 6th January – Electoral votes are counted
  • 20th January – the new president of the United States is inaugurated

Why do the markets care about the US presidential elections?

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The results of a United States presidential election affect the financial markets in multiple different ways – some are predictable, while others are more indirect and subtle.

The overarching opinion of the successful candidate, both in America and beyond, directly affects the strength of the US dollar, which of course has ripple effects around the world as the primary reserve currency.

Each candidate has their own policies on several matters, which will affect how the US spends its money and how markets are impacted by this. For example, the president’s stance on international trade, US debt and emerging market debt, foreign aid, relations between America and various nations and more.

All of these would have ripple effects on things like emerging markets’ economies, the US dollar’s strength or volatility, forex patterns, strength of international trade and much more.

What, historically, are the best election outcomes for markets?

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Interestingly enough, U.S. Bank recently came out with research that compares election results with returns on the stock market and the S&P 500 in particular. 

According to their research, the best election results, in terms of market returns, are loosely correlated with either Democrats in control of the White House and Republicans in control of Congress, or Democratic control of the White House and split party control of the Senate and House between the two parties. 

What are the latest polling results in the US election race? 

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The internet is awash with sites tallying the voter sentiment week by week in the US, and competition appears to be tight between the two candidates right now. 

Polling average site 270toWin found Biden in the lead by just 1% with a 45% polling average, with Donald Trump close behind with 44%. 

Fellow polls site Fivethirtyeight, meanwhile, said that a recent YouGov poll showed 43% of voters for Trump winning the presidency and 42% for Biden, while an Ipsos poll conducted around the same time showed that 37% were in favor of Biden, and 36% in favor of Trump. 

Also interesting, a latest Ipsos US opinion poll centered around the election found that the majority of Americans believe that neither Trump, nor Biden, should have second terms and that both men are too old to do so. 

These figures seem to suggest that both presidential candidates have quite the fight ahead of them – both in terms of stiff competition from each other, and a fight for the support of the American people. 

Donald Trump Joe Biden USA Economic Political