News

Bruno Cavalier
Chief Economist at ODDO BHF

The coronavirus pandemic, the ensuing economic crisis and racial strife have upended the elections on 3 November. After the collective failure to predict Donald Trump’s victory in 2016, political pundits are more cautious this time. With around 50 days to go to the election, it is all still to play for, but Joe Biden leads in the polls in most of the swing states and should benefit from an expansion of mail-in voting. The vote might be followed by a period of uncertainty. First if the results are slow to be officially announced. Second, if Congress remains divided, with the risk of an untimely fiscal tightening.

The week’s focus

After Labor Day, the US election campaign enters the home straight in the run-up to the vote set for 3 November this year. The presidential election dominates media attention as the winning side has a good chance of also triumphing in the other ballots, for the House of Representatives (all seats to be renewed), Senate (one-third of Senators up for re-election) and governorships (13). The three TV debates between Donald Trump and Joe Biden are scheduled for 29 September, 15 and 22 October, and that between Mike Pence and Kamala Haris for 7 October. There is often talk of an October "surprise" that could transform the race. With the incumbent president, it is hard to imagine any revelation that might bring the vast majority of the media to portray him in an even more negative light than they already do. To be (re-)elected, a candidate must secure a majority in the Electoral College, which comprises 538 members, split between the states proportional to their population. Winning a state secures all the electors for the victor. For historical or sociological reasons, many states always lean the same way. The result therefore hinges on the dozen or so swing states where the gap between the two sides is narrow and results in alternating victories between the Republicans and Democrats. This particular feature of the electoral system means that in practice winning the popular vote does not always lead to victory in the election. In 2016, Donald Trump won most of the swing states (table lhs). This gave him a bonus equivalent to 3 points of the popular vote, an unprecedented level, enough to largely outstrip his rival in terms of Electoral College electors (306 vs 232, a gap of 14%). History shows that a candidate can win even when this bonus benefits the opposing side (chart rhs).

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ODDO BHF CORPORATES & MARKETS, a division of ODDO BHF SCA, limited sharepartnership - Bank authorised by ACPR. ODDO BHF and/or one of its subsidiaries could be in a conflict of interest situation with one or
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garantir l'exactitude ni l'exhaustivité. Les opinions exprimées dans le document sont le résultat de notre évaluation à la date de la publication. Elles peuvent donc être révisées à une date ultérieure.

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