JPMorgan analysts said in a note Tuesday that when it comes to the US election, the market’s current consensus view is for Trump to win the White House, the GOP to win the Senate, and for Democrats to win the House.
Even so, the investment bank sees it as premature to predict the outcome, as many (70%) have high conviction that Congress will remain split.
“Investors remain sanguine about the market implications for the US elections,” said JPMorgan. “Only 12% of survey respondents see the election as the biggest threat to markets.”
When revealing their key takeaways from their election outlook analysts, JPMorgan said that a Trump win would result in a harder line on foreign policy, particularly with China, “with a view that ‘America must win and dominate’ through greater use of Executive Orders surrounding trade and investment.”
In addition, they note that Trump could roll back clean energy and environmental policies, while a Trumo administration would include loyalists who are also experienced politicians rather than inexperienced outsiders like some first-term picks and could include a number of market-friendly familiar names.
“Trump 2.0 could result in a more contentious relationship between the US and European Union with adverse consequences for Ukraine,” added JPMorgan.
Furthermore, the bank says that strength of governance and track record are the most important determinants for an election outcome, which “currently gives Biden an advantage.”
However, they feel the outcome of the 2024 US presidential elections will come down to just thousands of votes in a few pivotal swing states, mirroring the close outcomes of 2016 and 2020.
While presidential debates could sway undecided voters, they also carry risks for both candidates, according to the bank. Meanwhile, it’s noted that gen Z is a sizable voting bloc but also disillusioned, raising questions about voter turnout, and requiring specific policy appeals.