US Election Guide - Kamala Harris vs.

Donald Trump
PRESIDENTIAL RACE
On Tuesday November 5th, Americans will go to the polls to vote in the Presidential Election with the winner taking office in January 2025
for a four-year term.
Republican candidate Donald Trump and Democratic candidate Kamala Harris are locked in a very tight race, and while national polls
have Harris slightly in front, betting markets favour Trump, as do polls in swing states; what is certain is how momentum has shifted
towards the former President in recent weeks and months.
In terms of averages, FiveThirtyEight’s model assigns an 52% probability of a Trump win, and a 48% probability of Harris winning; pollster Nate
Silver sees a 54% and 46% chance respectively. Republicans are clearly favoured to win the Senate, with FiveThirtyEight averages assigning a
89% probability, while the House is neck and neck, with Republicans seeing a 53% likelihood and Democrats 47%.
On the night, the pivotal swing states (Arizona, Georgia, Michigan, Nevada, North Carolina, Pennsylvania, and Wisconsin) will be
viewed to see how the election is playing out, with Pennsylvania seen as the key state, as it is likely, but not impossible, that a
candidate will not win the election without it. In the polls and in recent weeks (via 538 and Nate Silver) PA has flipped to Trump.
For traders, focus will be on the Dollar, with a Trump win and a Republican sweep seen as the most bullish case for the Buck, with Commodity
FX, the Yuan, and MXN amongst EMFX heavily weighed on. If Harris won, the Greenback is expected to be weaker, with commodity FX
outperforming along with the EUR. Below we detail scenarios, and more nuanced trades.
For reference, the Presidential nominee with the most electoral votes becomes the President of the US. The Electoral College is a process in
which electors or representatives from each state in number proportional to the state’s population cast their vote and determine who will be
president. Each state gets a certain number of electors based on its representation in Congress, and there are a total of 538 electors, and the
candidate who gets more than half (270) wins. As such, a candidate could win the popular vote but lose the election if they do not receive 270 EC
votes.

SENATE RACE
(Figure 4 at the bottom for Senate composition)

Currently, the US Senate has 51 Democrats, including three independents, and 49 Republicans, so the body is controlled by
Democrats. There are 34 seats up for grabs in 2024 (including a special election in Nebraska) of which 23 are held by Democrats or
Independents. Republicans can retake control with a net gain of two seats or by winning the 2024 presidential election along with a net gain of
one seat.
Polls currently suggest that the Republicans will take control of the Senate with 51 Republicans vs. 49 Democrats . Within the 34 seats
up for grabs, 12 are seen as ‘Safe Democrat’ (CA, CT, DE, HI, MA, MN, NJ, NM, NY, RI, VA, WA), 9 ‘Safe Republican’ (IN, MS, MO, NE, ND,
TN, UT, WV, WY), 1 ‘Likely Democrat’(MD), 2 ‘Likely Republican’ (FL, NE), 5 ‘Lean Democrat’ (AZ, MI, NV, PA, WI), 2 ‘Lean Republican’
(MT, TX), 1 ‘Toss-up’ (OH), and 2 ‘Safe Independent’ (ME, VT). In the battlegrounds, using 270towin latest polling, Montana (MT) may flip
Republican, with currently Democratic Ohio (OH), a toss-up. Independent West Virginia (WV) is a safe Republican flip.

HOUSE RACE
All 435 seats are up for grabs, with 218 are needed to win a majority. Entering the 2024 election, Republicans hold a slim majority with 220 seats,
and Democrats hold 212, with 3 seats vacant.
According to The Cook Political Report, 174 seats are seen as ‘Solid Democrats’, 191 ‘Solid Republican’, 17 ‘Likely Democrat’, 10 ‘Likely
Republican’, 12 ‘Lean Democrat', 6 ‘Lean Republican’, leaving 25 ‘toss-ups’ (11 of those are currently Democrat: AK-AL, CO-08, ME-02, MI-
07, MI-08, NC-01, NM-02, PA-07, PA-08, VA-07, WA-03; and 14 of those are currently Republican: AZ-01, AZ-06, CA-13, CA-22, CA-27, CA-41,
CA-45, IA-01, IA-03, NE-02, NY-04, NY-19, OR-05, PA-10).

RESULTS
Overall, it may take several days or even weeks to count and confirm the winner of the 2024 US Presidential Election due to varying
state ballot-processing rules, potential recounts and anticipated high mail-in voting. As a reminder, in the 2020 election, AP declared
Biden the official winner at 11:26 am on November 7th, roughly three and a half days after the polls closed on Election Day.
In addition, an automatic statewide recount is mandated if the margin is 0.5% or less between candidates. Regarding Pennsylvania, the key
swing state, final recount results must legally be submitted by November 26th, with the official announcement expected on November 27th.
Looking at polling results times in states from the last two elections, it can be extremely varied. Regarding the seven swing states , using AP
call time, Arizona was 'Too Close' in 2016 and 01:00 in 2020. Following the sequence of using 2016 time followed by 2020 time, Georgia was
04:33 and 'Too Close', Michigan 'Too Close' and 22:58, Nevada 05:20 and 17:13 on 7th November, North Carolina 04:11 and 'Too Close',
Pennsylvania 06:35 and 16:25 on 7th November, and Wisconsin 07:29 and 19:16.
As of Thursday afternoon (October 31st), according to a tally by the Election Lab at the University of Florida, more than 60.443mln Americans had
already voted in early in-person voting or via mail-in ballots.

KEY STATE BATTLEGROUNDS

As alluded to above, Arizona, Nevada, Wisconsin, Michigan, Pennsylvania, North Carolina, and Georgia are the pivotal swing states
with Pennsylvania arguably the most pivotal. Arizona, North Carolina, and Georgia are the ‘Sun Belt’ states and if Trump wins these three
states, he wouldn’t need many more. If Trump wins these three states, he’d be on a path to 262 electoral votes, meaning he’d only have to take
one of the blue-wall states (Michigan, Pennsylvania or Wisconsin) to win the White House.
Overall, in recent weeks momentum has dramatically shifted towards the former President Trump with him now deemed the notable favourite
across betting markets, while polls still have Harris up nationally but net down across the swing states. Nonetheless, the race still remains
extremely close nationally and in the battleground states, with the vast majority of polls still within the margin of error.
On the swing states, Harris has a very marginal lead in Nevada, with slightly bigger leads in Wisconsin and Michigan, while Trump
leads in Arizona, North Carolina, and Georgia, which are all bigger than any of Harris’ leads with Pennsylvania marginally in Trump’s
favour, according to 538's averages. Using RCP's averages, Harris leads in two of the Blue Wall states (Wisconsin and Michigan), with
Trump leading in the other 5.

PENNSYLVANIA
Within the swing states, Pennsylvania is arguably the most pivotal as polls have the state neck-and-neck, albeit with Trump now eking out a lead.

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 PA has 19 EC votes, so desks note a couple of tens of thousands voters in the State could decide the election, as it is unlikely, albeit not
impossible, a candidate will win without PA. Pennsylvania is one of the three ‘Blue Wall’ states, alongside Michigan and Wisconsin, and in 2020
President Biden carried PA by just over 1ppt point, a raw margin of only about 80,000 votes in a state that cast almost 7mln for President.

ELECTORAL COLLEGE
(Figure 5 at the bottom for EC composition)

If the election was done on either 538 or Nate Silver averages, details below, Trump would win the Presidential election. In the figures
below, Figure 1 is the current map of the Electoral College aside from the pivotal seven swing states. Figure 2 is using 538 and Nate
Silver averages, as both have Trump and Harris having leads in the same swing states, while Figure 3 is using RCP's averages which
has a more decisive Trump victory.

Figure 1

Figure 2

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Figure 3

ELECTION IMPACT ON FINANCIAL MARKETS

Within the election, depending on whether there is a Republican Sweep, Trump win with split congress, Harris with split congress, or a
Democrat sweep will massively impact the market reaction seen.
In terms of broader market reaction , a Republican sweep is deemed the most Dollar bullish scenario as loose fiscal and tight monetary policy
plus tariffs are all positive. The Greenback would be boosted with a Trump sweep amid US exceptionalism, which would be amplified by tariffs
with countries exposed to China, such as AUD, also hit. If there was a Dem sweep, we would likely see Dollar weakness, with EMFX and the
Yuan likely outperforming due to the removal of risk of large China tariffs. Note, the magnitude of the moves is likely larger in the former.
Deutsche Bank sees the dollar rising across all currency pairs in a red sweep and see the dollar strong, but FX carry trades as most likely to
suffer in a Trump victory without Congress.
Elsewhere, and also detailed below, Gold and Copper and expected to see greatest strength and losses, respectively, with a Republican sweep
while for a Harris sweep both are seen gaining slightly.
In commodities, with a Republican sweep, ING notes tax cuts support oil prices in the short term, but focus on US energy independence and
pressure on OPEC+ to increase supply sees weaker prices longer term. In addition, key upside risk is stricter sanction enforcement against Iran.
In a Trump victory but split Congress, ING suggests that early focus on foreign policy sees easing tension in the Middle East weigh on oil prices.
Pressure on Russia/Ukraine to come to a deal puts further downward pressure on prices through 2025. Regarding a Harris Presidency, the bank
notes that lower growth prospects weigh on oil, short term, but longer-term will see lower prices than a Trump Presidency.
In terms of what stocks “want” , some desks note there isn’t a particularly strong preference for either Trump or Harris (Trump has eroded a lot
of the GOP’s historical edge on financial issues with his populist rhetoric, extreme tariff agenda, and disregard for fiscal conservativism). In terms
of sector specifics , a Harris win would benefit solar names whilst it would be the opposite if Trump won, while the former President also said he
would make the US the crypto capital of the world.
Treasuries, under a Trump Presidency, are seen falling with a steeper yield curve, and most aggressively with a Red sweep, ING notes, and
amid a risk-on theme, the bank sees a 5% handle for the US 10yr yield. On top of this, a gung-ho attitude to the ballooning fiscal deficit adds to
issuance, and potentially pressuring bonds further. If Trump wins, but Congress is split, bonds will be hindered on inflation risk. With a Harris
victory, the rise in yields is expected to be more muted, and rates lower because of a tighter fiscal response, which facilitates lower rates along
the yield curve.

US ELECTION SCENARIOS
(ING Scenarios at the bottom)

JPM SCENARIOS

MACRO IMPACT
Overall, Trump’s campaign proposals to raise tariffs, maintain loose fiscal policy and tighten immigration are all viewed as inflationary for the US
economy which would curtail the Fed’s room to keep lowering rates in the coming years, if implemented. Meanwhile, with a Harris win, the Fed
would likely feel more onus to bolster US economy given less fiscal support. If Trump won, but without a sweep, the lingering fears from tariffs
and tax cuts extensions may make the Fed conscious of not cutting too much in 2025.
Credit Agricole says that FX investors have been focusing on two equally likely outcomes: 1) President Harris with a divided Congress that could
result in a dysfunctional government but leave the US fiscal policy stance and economic outlook little changed, or 2) President Trump and a ‘red
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 wave’ in Congress that could lead to extra fiscal spending and trade tariffs. As such, the firm notes that the risk-reward ahead of the vote could be
for muted downside but aggressive upside for the USD.
Looking at the wider macro impact, with a Republican sweep the confirmation of tax cuts may give growth an earlier lift while ING notes
encouragement of reshoring keeps the momentum strong, while inflation would likely be lifted given tax cuts and support for domestic demand. In
the event of a Harris victory, somewhat tighter fiscal policy will be a headwind to growth, but a more certain trade and economic backdrop could
unwind some of the risk, also extended by if the Fed feels more content with a lower inflation profile. On the inflation footing, likely to see less
pressure in the medium term.
Goldman Sachs sees a Harris win as being the bigger boost for the US economy in the coming two years, arguing that economic output will take
a hit next year under the Trump banner, and that is mostly from increased tariffs on imports and tighter immigration policies. GS adds that jobs
growth will also be stronger under a Democrat government as opposed to a Republican one. On inflation, GS said that a Trump win will likely lead
to a rise in core inflation amid increased tariffs on auto imports from China and the EU.

CURRENT POLLING
In terms of recent changes and current polling in the swing states :

(Polls as of October 31st vs prev. W/W Oct. 24th, and M/M September 29th)
Arizona (AZ): Trump +2.2 (prev. Trump +1.8 W/W; Trump +1.0 M/M); Trump +2.3 (Trump extends his lead 0.3 W/W & +1.0 M/M). (11 electoral
college votes)
Nevada (NV): Harris +0.1 (prev. Harris +0.2; Harris +1.5); Harris +0.1 (Trump trims her lead 0.3 W/W & +1.7 M/M). (6 electoral college votes)
Wisconsin (WI): Harris +0.8 (prev. Harris +0.4; Harris +1.9); Harris +0.7 (Unchanged W/W & Trump trims her lead 1.1 M/M). (10 electoral
college votes)
Michigan (MI): Harris +1.0 (prev. Harris +0.7; Harris +1.9); Harris +1.1 (Harris extends her lead 0.4 W/W; Trump trims her lead 0.7 M/M). (15
electoral college votes)
Pennsylvania (PA): Trump +0.4 (prev. Trump +0.2; Harris +1); Trump +0.6 (Was even a week ago, so Trump extends his lead by 0.6 W/W & 1.7
M/M).(19 electoral college votes)
North Carolina (NC): Trump +1.1 (prev. Trump +0.9; Harris +0.1); Trump +1.1 (Trump extends lead by 0.2 W/W & +0.8 M/M). (16 electoral
college votes)
Georgia (GA): Trump +1.8 (prev. +1.5; Trump 0.6); Trump +1.9 (Trump extends his lead by 0.4 W/W & 1 M/M). (16 electoral college votes)

W/W & M/M via 538 averages; W/W and M/M via Nate Silver

As can be seen by the polls, and highlighted by the W/W and M/M change Trump has extended his lead, or trimmed Harris’ leads in every single
swing-state (aside from W/W in Michigan) continuing to highlight how the odds of him winning the election have improved and how the
momentum is with the former President.

Meanwhile, nationally:

(Polls as of October 31st vs prev. Oct. 30th D/D, Oct. 24th W/W, and Sept. 29th M/M)
RCP Average: Trump +0.4 (prev. Trump +0.4, Harris +0.1, Harris +1.8).
538: Harris +1.4 (prev. Harris +1.4, Harris +1.7, & Harris +2.8).
Nate Silver: Harris +1.1 (prev. Harris +1.1, Harris +1.6, & Harris +3.3).
PredictIt: Harris USD 0.47 vs. Trump USD 0.57 (prev. 0.44 vs. 0.58, 0.48 vs. 0.58, & 0.56 vs. 0.49).
Polymarket: Harris 35% vs. Trump 65% (prev. 33% vs. 67%, 39% vs. 61%, & 51% vs. 48%).

RECENT CHANGES
The screenshot below, as of October 31st, shows Polymarket’s betting odds have shifted massively in Trump’s favour in recent weeks
and months, while RCP average has also notably shifted with Trump ahead for the first time since August.

via Polymarket

via RCP averages

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KEY POLICIES
Key Policy
Harris Trump
Issue

Day-one priority would be trying to reduce food and housing costs for
Economy working families. To ban price-gouging on groceries, help first-time To “end inflation and make America affordable again”.
home buyers and provide incentives to increase housing supply.
Raise corporate-tax rate to 28% (prev. 21%) and WSJ estimates it
would generate more than USD 1.3tln over a decade, one of the largest
revenue-raising items in her plan. Lift corporate alternative minimum tax Large part of Trump’s 2017 tax cuts expire at the end of 2025,
for large profitable Cos. to 21% (prev. 15%). Would keep Biden’s and he wants to extend them for the foreseeable, keeping the
pledge to prevent tax increases on households making under USD lower tax rates. Wants to cut corporate tax rate even
Taxes
400,000. Pledges refundable child tax credit that would provide USD further from 21%, which he got down from 35% when he
3,000 per child to most parents and up to USD 6,000 for parents of new- was last in office. Will look to introduce 15% 'Made in
borns. Supports lifting top marginal tax rates on some income to as high America' corporate tax rate.
as 44.6%, though she would set a top capital-gains rate of 33%, below
Biden’s proposed level.
Will raise tariffs on foreign countries/companies and there
will be large tariffs if products are imported from a
different country. Will use tariffs to encourage production in
the US. 100% tariff on every single car coming across
Would, for the most part, follow the trade policy of President Biden, who
Mexican border but says it will not be inflationary, which many
Tariffs has maintained most of Trump’s tariffs on China while raising some,
economists do disagree with. Would add tariffs of up to 20%
such as on EVs. Overall, will not raise tariffs.
on every foreign import coming into the US, as well as another
tariff upward of 60% on all Chinese imports. Would impose a
“100% tariff” on countries that shift away from using the US
dollar.
Record numbers of people crossed from Mexico at the end of 2023, but
In what is one of his primary objectives and as he said
the numbers have fallen since. In this campaign, she has toughened
Immigration throughout his campaign, he will deport “millions and
her stance and emphasised her experience as a prosecutor in
millions”, but quite how is not clear, yet.
California taking on human traffickers.

Negative for solar-stocks as he is the less environmentally

Positive for solar stocks. When Harris gave the winning vote to the
friendly candidate. Previously Trump was known for his tag
IRA, it provided several hundred billion dollars in grants, loans and tax
Energy and line, relating to oil, for “drill baby, drill”. Would eliminate a USD
incentives to promote renewable energy. Her position is that they have
Environment 7,500 tax credit for EVs. Pledges to repeal the IRA and its
got to invest in diverse sources of energy so they reduce reliance on
subsidies for green technologies such as wind-turbine
foreign oil.
manufacturing, solar components and battery plants.

On the Russia/Ukraine war, said he will end the war

immediately and would do it before he even got into
office, regardless of geopolitical risks. Would end the war in
Unwavering support for Ukraine, and will seemingly back Ukraine Ukraine in 24 hours through a negotiated settlement with
and NATO to the hill. Has been a long-time advocate for a two-state Russia, a move that Dems say would embolden Putin. When
Geopolitics
solution between the Israelis and Palestinians, and has called for an questioned on how he will end the Russia/Ukraine war at the
end to the war in Gaza. debate, and if it’s in the best interests for Ukraine to win the
war, he refused to answer but said “I want the war to stop.”
Positioned himself as a staunch supporter of Israel but said
little on how he would end the war in Gaza.

ING ELECTION SCENARIOS

1) Republican clean sweep.

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2) President Trump, but not a sweep. Donald Trump wins the Presidency, but Congress split (Democrats win Senate, Republicans win
House).

3) President Harris

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Figure 4

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Figure 5

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