Trump`s Re-election Odds Crash to 14%
(Wed, 24 Jun 2020). A breaking New York Times poll puts Biden lightyears ahead of Trump in the White House race. An Economist prediction is even worse, putting Trump`s re-election odds at just 14%.
Dow Jones Industrial Average (DJIA) futures collapsed in early trading Wednesday. A New York Times poll puts Biden 14 points clear of Trump in the 2020 election campaign. Financial advisors warn clients of a ‘blue sweep’ in November. Traders are beginning to price in the possibility of a ‘blue sweep’ as Republicans face losing the White House and the Senate this November. Dow Jones Industrial Average (DJIA) futures slumped 300 points in early trading Wednesday as dire numbers come in for the Trump re-election campaign.
According to an Economist model, Trump has a mere 14% chance of retaking the White House. The model puts Democrat candidate Joe Biden at an 86% chance of winning. And in this morning’s New York Times / Siena College poll, Joe Biden has a 14 point lead over President Trump.
Wall Street is now bracing for a Democrat victory. Financial advisory firm Signum Global Advisors told clients yesterday to prepare for the blue sweep.
Dow Futures Crumble On NYTimes Numbers
Dow futures tracked lower overnight, then collapsed early morning as the New York Times poll was revealed. At 5.27am ET, futures were down 336 points (1.29%). S&P 500 futures were down 0.7% while Nasdaq Composite futures held stronger at -0.36%. The tech-heavy index hit a new intraday high in yesterday’s session.
Trump’s Fading Grip On White House Spooks Investors
It’s no secret that Wall Street tends to favor a Republican president. Back in early February, the stock market rallied near all-time highs as Trump looked unbeatable. No doubt, the president’s commitment to deregulation and tax cuts helped push the stock market higher during his tenure. Then the pandemic happened.
Millions are now unemployed and the economy is on life support. Many disapprove of how Trump handled the health crisis. Even Republicans. The president’s approval rating has slumped since March and direct polling puts him way behind Biden.
The Economist data is particularly dire, predicting Trump will losing the key battleground states of Florida, Pennsylvania, and Michigan. Those are states in which he beat Clinton in 2016. The Economist estimates are based on polling data, as well as economic and demographic figures.
Expect Dow Jones Volatility Going Into The Election
The election cycle is likely to inject more volatility into the stock markets going into November. But that could ultimately open up some buying opportunities for long-term investors. And while these shock poll numbers might spook traders for a day or two, money managers are probably comfortable with a Biden presidency. Back in January, Wall Street was certainly nervous about Elizabeth Warren or Bernie Sanders in the White House. But they were neutral on Biden – the moderate candidate.
Keep Your Eye On Hedge Fund Flows
One more thing to watch this morning: hedge fund inflows are coming back. $44 billion was yanked from hedge funds in March and April as panic swept the market. But new data shows that May saw the first uptick. Hedge funds saw $1.7 billion inflows last month in a sign that investors are coming back in from the sidelines.
That isn’t the whole picture though. Barclays predicts billions will be pulled from hedge funds before the year is out as volatility continues to plague the markets. Elsewhere today, investors will be grappling with increasingly large outbreak numbers in states like Texas, Arizona, and Florida. Health experts say these regions should consider pausing their re-opening efforts.
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