• A batch of polls conducted after the dust settled from party conventions show Biden enlarging his lead.
  • President Trump may push for a larger fiscal package to increase his chances.
  • Markets have room to rise after the recent downward correction.

"It's the economy stupid" – that comment around Clinton's 1992 election campaign is where President Donald Trump is hoping to beat challenger Joe Biden. Republicans have been reluctant to support another generous package – and even reduced their offers to below $1 trillion – after the encouraging jobs report.

August's Non-Farm Payrolls statistics showed the unemployment rate sharply fell to 8.4% – far better than expected. However, they may change their calculous after looking at recent worrying polls for their standard-bearer. 

Providing more stimulus could win votes and help Trump be seen as capable on handling the economy. He is far behind on two other issues that matter to Americans – handling of the virus and race relations. Despite touting "Law and Order," polls have shown that voters trust Biden to provide calm rather than Trump.

Moreover, the president reportedly called described dead soldiers as "losers" and "suckers" – a message that is incompatible with supporting the military nor the police. 

Boosting the economy could distract attention from these topics – and also shore up equities, which have been correcting. The president partially measures his success on the performance of stock indexes. 

Trump trails in battlegrounds

Raven Pack's election monitor shows Biden is set to flip five states from Democrat to Republican" Pennsylvania, Michigan, Wisconsin, Florida, and the latest to switch its preference is North Carolina. That would give Biden a 108 electoral vote win – higher than Trump's margin in 2016.

Nate Silver's FiveThirtyEight is showing Biden has a 74% chance of winning, up from 71% when the model was launched in early August. That means Trump received no convention bounce. The latest push toward the Democrat came from an NBC poll showing a nine-point lead for Biden in Pennsylvania, a key battleground state that Trump carried in 2016.

Source: FiveThirtyEight

RealClearPolitics is pointing to a Biden lead of 7.1% in national polls, mostly unchanged from several weeks ago. The RCP Average does not include the latest Ipsos poll pointing to a 12-point gap

Source: RealClearPolitics 

The Economist's model is showing sliding chances for a Biden victory – but he still has a broad 83% probability of replacing Trump at the White House according to the magazine's model. 

Source: The Economist


Markets tend to prefer full Republican control of Congress and the White House – allowing for deregulation and lower taxes. However, there is still time ahead of the elections. Currently, investors are concerned about the lack of emergency federal help – most of that lapsed at the end of July.

With diminishing chances of re-election – and perhaps a delay in obtaining a coronavirus vaccine – the president may now opt to push his fellow Republican fiscal hawks toward compromising with Democrats and boosting the economy. That may boost stocks, at least in the short term. 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended Content

Recommended Content

Editors’ Picks

EUR/USD steadies near 1.0550, looks to post modest weekly gains

EUR/USD steadies near 1.0550, looks to post modest weekly gains

EUR/USD has lost its bullish momentum after having climbed above 1.0570 with the initial reaction to the US data in the American session and retreated toward the mid-1.0500s. On a weekly basis, the pair remains on track to close in positive territory. 


GBP/USD struggles to hold above 1.2300

GBP/USD struggles to hold above 1.2300

GBP/USD has edged lower following a jump above 1.2300 in the early American session on Friday. The market mood remains upbeat ahead of the weekend with Wall Street's main indexes posting strong daily gains on upbeat US data. 


Gold stays below $1,830 as US yields edge higher

Gold stays below $1,830 as US yields edge higher

Gold continues to fluctuate below $1,830 on Friday and looks to close the second straight week in negative territory. Fueled by the risk-positive market environment, the benchmark 10-year US Treasury bond yield is up more than 1% on the day, limiting XAU/USD's upside.

Gold News

Why Cardano could surprise over the weekend

Why Cardano could surprise over the weekend

ADA  set to close out the week with a gain on the workday trading week and over the weekend? Central banks signaled that the rate hike cycle is ending, meaning less stress and tight conditions for trading, opening up room for some upside potential with Cardano set to pop above $0.55 and test a significant cap.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!