From Here to Election Day: What to Watch

From Here to Election Day: What to Watch
CATEGORIES: Viewpoints

From Here to Election Day: What to Watch

With fewer than 60 days until the U.S. presidential election – and endless noise surrounding both major-party campaigns – what should investors pay attention to between now and 8 November?

First, of course, the national polls that measure the matchup between Hillary Clinton and Donald Trump matter. While Democratic nominee Clinton currently has a slim lead in national polling over her Republican counterpart, monitor whether Clinton’s polls continue to slip from her post-convention highs or begin to stabilize.

Second, pay attention to the poll numbers of third-party Libertarian candidate Gary Johnson. Although third-party candidates have rarely won the White House (Abraham Lincoln was the last third-party candidate to win the presidency), they can potentially influence electoral outcomes (as some say Ross Perot did in 1992 or Ralph Nader did in 2000). At 9%, Johnson’s numbers may not be sufficient to matter much in November, but observe whether those numbers increase – and whether Johnson is able to get on the increasingly important first debate stage in late September.

In addition to national polling, swing state polling is just as – if not more – important. Indeed, because of the U.S. Electoral College system, the race for the White House will likely be decided by 10 to 12 swing states. Of those, Ohio, Pennsylvania, North Carolina, Virginia and Florida may be the most important, as Donald Trump, in particular, will likely have to win most of these states (and keep those that Romney won in 2012) in order to get to the 270 Electoral College votes needed to win the White House. As of now, Clinton leads in all of these states except Florida, according to Real Clear Politics.

Another factor worth considering that has correlated with past election outcomes: the incumbent president’s approval ratings. Dating back to the Johnson era, if the incumbent president has enjoyed an approval rating above 50% according to Gallup, the candidate of that party has generally gone on to win the White House, and vice versa (the exception was Al Gore, who won the popular vote in 2000 but lost the electoral vote). If past is prologue, this could be positive for Hillary Clinton: President Obama is enjoying some of the highest approval ratings of his second term, at more than 50%.

Additionally, watch returns of the stock market, as the direction of the stock market has correctly predicted outcomes in 19 of the past 22 races since 1928. Specifically, if the stock market has returned a positive three-month return before the election, the party in power has typically stayed in power – and vice versa.

Last, tune in to the three upcoming presidential debates (26 September, 9 October and 19 October), which could be more determinative than debates in recent elections given the higher percentage of undecided voters in this election cycle.

More to come.


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