The upcoming US presidential election has stirred up some unease on financial markets over the past few days. This was triggered by the falling opinion poll scores for the Democratic candidate Hillary Clinton. These have recently deteriorated again significantly from the state of play not too far back when polls showed a lead that suggested a relatively sure chance of victory. The election takes place on 8 November and the denigration of the opponents by ever more revelations has recently picked up considerable momentum again. True to the motto “voters have a short memory” it is no coincidence that damaging information is only now coming to light, virtually on the finishing straight to the election date. We continue to expect that Hillary Clinton will be the next president of the USA.
The outcome of next Tuesday’s presidential and Congressional elections will probably not have any influence in the short term on the momentum of US or global economic growth. But US citizens’ voting behaviour will definitely send out important signals for the medium-term, and not only with respect to foreign trade policy. In the past there have usually been political changes when a president’s eight-year term of office came to an end.
This election will also set the scene for the next few years. Admittedly, both candidates intend to stimulate economic growth either by investing in infrastructure or by cutting taxes. But Clinton’s financial plans have more solid foundations and are not likely to drive government debt up so steeply. If Trump gets into office and is really in a position to implement his radical plans with respect to illegal immigrants, then this would put a visible curb on economic growth. Mass deportations would not only appreciably reduce the number of workers, but also the number of consumers.
There is a great discrepancy between the candidates’ election manifestoes, especially with respect to energy policy. While under a Democratic president the USA would extend its role in renewable energy at the international level, Trump aims to return to fossil fuels and also intends to turn his back on climate protection. For some industrial sectors and the downstream service sectors, this could have substantial repercussions
The latest revelations regarding Hillary Clinton have had a considerable impact. This is possible because neither of the candidates is very popular with voters. Accordingly, it is quite possible to influence undecided voters within a short period of time. The recent increase in the amount of discrediting news that has been released shortly before the election date is, therefore, pure tactics: the overwhelming majority of persons who say in opinion polls that they will vote for Hillary Clinton, for example, will only do so in order to prevent Donald Trump becoming the next president. And the situation is identical the other way round. The democratic candidate could, therefore, lose even more ground if there are further revelations.
What makes every presidential election so exciting is not so much the “sure-fire states” such as, for example, California or Texas, which are firmly held by the Democrats or the Republicans, but the fiercely-contested “swing states,” which are sure to attract a great deal of attention on polling day. There are nine of these federal states, in some of which a very tight result indeed is expected. Just a few days before the vote, opinion polls for Florida show a very close-run neck-and-neck race with Donald Trump slightly ahead. This is the largest swing state, which brings the winner an ample 29 electoral-college votes at a single stroke. The opinion polls also indicate a very close-run result for some other federal states. But on the bottom line the results of the voting-intention polls and of the primaries currently tend to suggest that Hillary Clinton will win the election.
The ethnic composition of the around 226 million people who are eligible to vote also plays an important role in the outcome of the election. The composition of the electorate has changed in the past few years, which should actually play into the hands of the Democrats. But out of the population group of the Hispanics and Asians, which has increased in size by four percentage points since 2008, usually not even one out of two voters makes use of their right to vote. It is, therefore, uncertain to what extent the democratic candidate can benefit from this group.