Summary of the report
Since the first round of debate in the US presidential election and Trump's diagnosis, Biden's election advantage has continued to expand.
Opinion poll data show that Trump's diagnosis of public health events and rapid recovery have not been absorbed.「Sympathy vote」，9Biden's advantage in the polls has expanded since the end of the month.The poll ratings of Biden and Trump rose from 49.4% to 43.3% on September 29 to 51.6% to 41.6% on October 13. Biden's lead in swing states also continues to be solid, with 357 electoral votes, well above the 270 winning requirement. Trump must win at least five swing states (Florida, Pennsylvania, Ohio, Michigan and North Carolina) if he is guaranteed to win in Texas and Georgia.
Odds and donation figures are also bad for Trump.The odds of Biden's election have risen to 68.85 per cent from 56.33 per cent at the end of September, according to SportsBetting Dime betting odds. In addition, Biden's total fundraising surged in August and surpassed Trump. Biden's presidential campaign raised $3.8 million within an hour of the debate, breaking the fundraising record within an hour.
Has Biden locked in the victory? Trump's job support has risen as a result of economic recovery and increased foreign policy, and the possibility of his re-election cannot be ruled out for the time being.
The above-mentioned poll approval rate refers to the American people's preference for the election result; in addition, the pollster Gallup also measures the American people's satisfaction with the presidential job, which is known as the presidential job support rate. Trump's job approval rating fell from a high of 49% to 38% after the Freud incident on May 25. However, Q3 in the context of the recovery of the US economy and the strengthening of foreign policy, Trump's job approval rating has risen to 46%, so the possibility of Trump's re-election cannot be ruled out.
A critical time point in the follow-up to the US election: in theory, the controversy over the election vote is expected to be held in「Safe harbor」The date (before) is lifted.
The results of the US presidential election and congressional re-election are likely to be postponed due to mailing ballots. But unless the supreme law gives the green light, the vote dispute in the general election can be settled on the "safe harbor" day.If the election results are not good for Trump, he may make a fuss about the dispute over mailing ballots and seek decisions from Congress and the Supreme Court on the results of some states. The ruling or recount may last for weeks, but even disputed election results are likely to take effect if delayed until "safe Harbor" Day, which falls on December 8 this year. In the 2000 election, the U.S. Supreme Court suspended a recount in Florida on the eve of safe Harbor Day, after the results took effect immediately.
若「Safe harbor」If the result of the election is not announced, the general election will enter the provisional election procedure on the polling day of the Electoral College.State electoral college ballots are held on December 14th, and the process is generally a formality. However, if the dispute over the general election on 8 December is not settled due to various factors (detailed later), the general election will enter the provisional election process on the polling day of the Electoral College, and there is no guarantee that the dispute and chaos will end before 20 January the following year.
In addition to the controversy over votes, there may also be other variables in this US election.
The possibility that Trump refuses to admit defeat and seeks a recount on the grounds of a postal ballot dispute cannot be ruled out.According to the NBCLX/ YouGov survey, 65% of Democrats will vote by mail, while only 35% of Republicans will vote by mail. Once Trump loses the election, he will have reason to seek a court recount to invalidate some mailed ballots. Trump formally nominated conservative Barrett as a federal judge on Sept. 26. If the appointment is approved by the Senate before the presidential election, the proportion of judges nominated by Republicans and Democrats in the federal court will reach 6:3. The Supreme Court may be inclined to rule in favor of Republican candidates.
Once Trump asks the state legislature to appoint electors, the outcome of the election will be uncertain.In the event of an election dispute, Trump may require some states to decide on electors through state legislature elections so that they can elect Republican-leaning electors and win swing states. But the governors of three of the five swing states mentioned above are Democrats, and the governors have the right to authenticate the electors and submit them to Congress, resulting in two opposing voting results in some states. In this case, the new Congress, established on January 3 of the following year, will rule on this. However, similar to the general election, there is also a dispute over mailing ballots in congressional elections, which may lead to a temporary stalemate.
If the election dispute continues until「Safe harbor」In the future, the appointment of the president may be decided by a vote of Congress.Because of the Republican dominance at the Supreme Court level, if Trump loses and there is an election dispute, the Supreme Court may allow the dispute to continue into the "safe harbor" future. According to the 12th Amendment to the Constitution of the United States, after the occurrence of this situation, the general election will go into a provisional election process, in which the House of Representatives will elect a president (one vote for each state, 26 votes or more will be elected), and the Senate will elect a vice president (one vote per person. 51 votes or more were elected). The election method will give the Republican Party an advantage. However, if the President cannot be elected before the President formally takes office on January 20 of the following year, the Presidential succession Act shall apply to the Vice President; if the Vice President cannot be elected, the Speaker of the House of Representatives will assume the office of President.
In the event of defeat, the possibility that Trump will resign voluntarily before leaving office cannot be ruled out.Michael Cohen, a former personal lawyer for Trump, said that if Trump loses the election, he is likely to resign before the formal transfer of power on January 20 the following year, handing over the presidency to Pence in exchange for some personal benefits. Nixon had a similar operation after Watergate.
What impact will the uncertainty of the US election have on global capital markets?
There is no need to read too much into the short-term impact of uncertainty in the US election.The uncertainty of the US election is only a disturbing factor, because the election itself will not have an impact on the US economy, nor will it immediately reverse monetary policy. However, in this process, the amplitude of various types of assets is bound to increase, and the upper limit of their impact on the market can be referred to the impact of the Brexit referendum. That is, in extreme panic, the market will quickly sell risky assets and form a sense of risk aversion, but soon return to rational bargain-hunting to buy risky assets. In addition, if the market Risk-off again, the Fed can still help ease the market pressure by increasing positive buybacks.
The long-term impact of the results of this presidential election on the US economy, monetary policy and even the style of US stocks should not be underestimated.If Trump is re-elected, ultra-low interest rates in the United States may continue until 2023, and US stocks may further bubble in the next two years. If Biden is elected, the American technology cattle may come to an end in the next two years. In addition, if Trump's defeat means that American society once again shifts from "efficiency" to "fairness" and promotes the Democratic Party's ruling influence. During the period of rising political influence of the Democratic Party, the leverage ratio of the US government as a whole is on the low side, corresponding to the rising period of risk-free interest rates, the proportion of the middle class is rising, which is easy to promote the bull market of consumer stocks. However, before the bull market of consumer stocks comes, the United States needs to increase the proportion of the middle class, and before the proportion of the middle class increases, the technology cattle may be the first to end.
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Since the first round of debate in the US presidential election and Trump's diagnosis, Biden's election advantage has continued to expand.
Opinion poll data show that Trump's diagnosis of public health events and rapid recovery did not absorb a "sympathy vote", and Biden's advantage in the polls has expanded since the end of September.The average RealClear Politics poll data show that Biden and Trump's poll ratings rose from 49.4% to 43.3% on Sept. 29 to 51.6% to 41.6% on Oct. 13. Biden's lead in swing states also continues to be solid. Judging from the existing swing state polls (see figure 2 and Table 1), Biden will have 357 electoral votes, far exceeding the 270 victory requirement, and Trump must win in Texas and Georgia. At least five swing states (Florida, Pennsylvania, Ohio, Michigan and North Carolina).
Odds and donation figures are also bad for Trump.SportsBetting Dime's betting odds data show that the odds of Biden and Trump winning the election changed from-129,107 on September 29th to-221and184on October 12th.[1]. In other words, betting odds show that the probability of Biden being elected here has increased from 56.33% to 68.85%. Judging from the donation data, the total amount of money raised by Biden released by the Federal Election Commission (FEC) surged in August and surpassed Trump. Biden's presidential campaign raised $3.8 million within an hour of the debate, breaking the fundraising record within an hour[2]It also shows that the number of people who support Biden's election has increased after the debate.
Has Biden locked in the victory? Trump's job support has risen as a result of economic recovery and increased foreign policy, and the possibility of his re-election cannot be ruled out for the time being.
The above-mentioned poll approval rate refers to the American people's preference for the election result; in addition, the pollster Gallup also measures the American people's satisfaction with the presidential job, which is known as the presidential job support rate. In our report, "brewing changes-Mid-term prospects for overseas Macroeconomics 2020," we mentioned the emergence of protesters in the United States after the violent law enforcement death of African-American citizen Freud by an American police officer on May 25. Since then, Trump's job approval rating has fallen from a high of 49% to 38%. But Q3 in the context of the recovery of the US economy and the strengthening of foreign policy, Trump's support rate for Gallup work has risen to 46%, so we still can not rule out the possibility of Trump's re-election.
Critical time point in the follow-up to the US election: theoretically, the dispute over the election vote is expected to be resolved on the "safe harbor" day (before).
The results of the US presidential election and congressional re-election are likely to be postponed due to mailing ballots.November 3 (November 4, Beijing time) is the deadline for voting in this general election. State and national voting results are basically announced on the polling deadline, but the results of this year's election are likely to be postponed. According to a survey by the Washington Post, 84% of voters are expected to vote by mail this year under the impact of public health events, compared with only 1max 4 in 2016.[3]. Mailing ballots will postpone the result. Both sides of the debate and the moderator of the debate seem to have acquiesced in the possibility that the result of the vote will not be available on 3 November. As the congressional election and the presidential election use the same vote, the result of the change of seats in Congress will also be postponed.
Unless the supreme law gives the green light, the vote dispute in the general election can be settled on the "safe harbor" day.Although the results will not be delayed for long, according to Trump and his party, if the election results go against Trump, he will make a fuss about the controversy over mailing ballots and seek decisions from Congress and the Supreme Court on the results of some states. The ruling or recount may take several weeks, but according to United States Code Chapter 3, Chapter 1, Article 5 (3 U.S.Code §5)[4]The results of the election must be announced six days before the Electoral College Day (December 14 this year), that is, December 8 this year, which is also known as "safe Harbor" Day. Once delayed to "safe Harbor" Day, even disputed election results are likely to take effect directly. In the 2000 election, the U.S. Supreme Court suspended a recount in Florida on the eve of safe Harbor Day, after the results took effect immediately. Thus, unless the supreme law gives the green light, even if there is a dispute, the result of the general election should be settled on December 8th.
If the "safe harbor" (day) fails to announce the election results, the general election will enter the provisional election procedure on the polling day of the Electoral College.State electoral college ballots are held on December 14, and electors generally vote for candidates with a majority in accordance with the state's public opinion, so the process is generally a formality. On January 6 of the following year, Congress will count the votes of the Electoral College and finally announce the choice of president, and the president will officially take office on January 20 of the following year. However, if the election dispute is not settled by various factors (detailed later) on December 8, that is, the election results of some states cannot be determined, the provisional election process will be entered under the 12th Amendment to the United States Constitution, and there is no guarantee that the dispute and chaos will end before January 20 of the following year.
In addition to the controversy over votes, there are other variables in this US election.
The possibility that Trump refuses to admit defeat and seeks a recount on the grounds of a postal ballot dispute cannot be ruled out.According to the NBCLX/ YouGov survey, 65% of Democrats will vote by mail, while only 35% of Republicans will vote by mail[5]. So if Trump loses, he will have reason to seek a court recount to invalidate some of the mailed votes. His claim may be accepted by the Supreme Court. On September 26, Trump formally nominated Barrett, who is more conservative on health care, abortion, religion and other issues, as a federal judge.[6]If the appointment is passed in the Senate before the presidential election, the proportion of judges nominated by Republicans and Democrats in the federal court will reach 6:3, and the Supreme Court may be inclined to rule in favor of Republican candidates.
Once Trump asks the state legislature to appoint electors, the outcome of the election will be uncertain.According to Article 2 of the Constitution of the United States, state legislatures have the power to appoint electors for their states, as confirmed by the Supreme Court in Bush v. Gore in 2000.[7]. Trump may ask some states to decide on electors through state legislature elections in the event of a disputed election. The Senate councils of the five swing states mentioned above are all controlled by Republicans, from which Trump can choose Republican-leaning electors and win swing states. But three of the five swing states have Democratic governors, who have the right to authenticate electors and submit them to Congress, leading some states to produce two opposing voting results. In this case, the new Congress, established on January 3 of the following year, will rule on this. However, similar to the general election, there is also a dispute over mailing ballots in congressional elections, which may lead to a temporary stalemate.
If the election dispute continues into the "safe harbor" future, the presidential appointment may be decided by a vote of Congress.Because of the Republican dominance at the Supreme Court level, if Trump loses and there is an election dispute, the Supreme Court may allow the dispute to continue into the "safe harbor" future. According to the 12th Amendment to the Constitution of the United States, after the occurrence of this situation, the general election will go into a provisional election process, in which the House of Representatives will elect a president (one vote for each state, 26 votes or more will be elected), and the Senate will elect a vice president (one vote per person. 51 votes or more were elected). The election method will greatly offset the majority of Democratic seats in the states, and although Democrats are likely to win 227th seats in the House of Representatives (more than 218s are the majority), 26 states with the majority of Republicans may have an advantage in this segment, according to 270towin. And if the President cannot be elected before the President formally takes office on January 20 of the following year, the Presidential succession Act shall apply to the Vice President; if the Vice President cannot be elected, the Speaker of the House of Representatives will assume the office of President.[8]。
In the event of defeat, the possibility that Trump will resign voluntarily before leaving office cannot be ruled out.Michael Cohen, a former personal lawyer for Trump, said that if Trump loses the election, he may resign before the formal transfer of power on January 20 of the following year, handing over the presidency to Pence in exchange for some personal benefits.[9]. Nixon had a similar operation after Watergate.
What impact will the uncertainty of the US election have on global capital markets?
There is no need to read too much into the short-term impact of uncertainty in the US election.In our October 4 report, "Review of the performance of various assets in the overseas Black Swan incident-- also on the impact of uncertainty in the US election," we pointed out that the uncertainty of the US election is only a disturbing factor, because the election itself will not have an impact on the US economy. nor will it immediately reverse monetary policy. However, in this process, the amplitude of various types of assets is bound to increase, and the upper limit of their impact on the market can be referred to the impact of the Brexit referendum. That is, in extreme panic, the market will quickly sell risky assets and form a sense of risk aversion, but soon return to rational bargain-hunting to buy risky assets. In addition, if the market Risk-off again, the Fed can still help ease the market pressure by increasing positive buybacks.
The long-term impact of the results of this presidential election on the US economy, monetary policy and even the style of US stocks should not be underestimated.If Trump is re-elected, ultra-low interest rates in the United States may continue until 2023, and US stocks may further bubble in the next two years. If Biden is elected, the American technology cattle may come to an end in the next two years. In addition, if Trump's defeat means that American society once again shifts from "efficiency" to "fairness" and promotes the Democratic Party's ruling influence. During the period of rising political influence of the Democratic Party, the leverage ratio of the US government as a whole is on the low side, corresponding to the rising period of risk-free interest rates, the proportion of the middle class is rising, which is easy to promote the bull market of consumer stocks. The bull market of consumer stocks represented by "Beautiful 50" in the 1960s and 1970s is the product of this background. If Biden wins, the US efficiency dividend and US stock valuation dividend will come to an end, and the expansion of US middle class share will be good for consumption. However, before the bull market in consumer stocks, the United States needs to increase the proportion of the middle class, and before the proportion of the middle class increases, the technology cattle may be the first to end.
Risk hint
(1) the analysis of the election situation in the United States is not in place, and the result of the election exceeds expectations.
(2) Public health events in the United States are more serious than expected.
(3) the Fed's monetary policy exceeded expectations.
(4) the US fiscal policy exceeded expectations.
