Webinar: Trump vs Biden – the economic outlook

Will the polls be right this time? In this live webinar, delivered hours before voting stations close, Keith Wade and Caspar Rock assess likely outcomes and consequences for investors.

"It seems one of the key swings in Biden's favour came after the first live debate," says Keith Wade, weighing up the reliability of election outcome predictions. "We all know what happened last time: Hilary Clinton was ahead, but Trump came in with the victory."

This time round pollsters have adjusted for the "shy Trump" voters, Keith says, but polls can of course be wrong.

While the presidential outcome appears strongly in Biden's favour, there is more uncertainty as to whether there will be a "blue wave" – meaning a Democratic win in Congress as well as the White House. "This is going to be close", Keith predicts.

"It will be interesting to see if people swing from Trump to Biden but, because they feel 'Republican at heart', they may vote for a Republican senator. That could result in a Biden presidency and a split Congress."

On the economy and financial markets...

Longer term, Keith Wade sees a Biden win as leading to higher economic growth for the US, driven by a stronger fiscal boost, increased immigration and less drag caused by protectionist policies. But tax increases would offset this growth over time.

Trade tensions with China are likely to persist, whatever the election outcome.

"Democrats are traditionally the party of protectionism," Keith says. "Biden, like Trump, will be watching the trade agreement with China."

Cazenove Capital's Caspar Rock agrees. "History post World War Two suggests Democrat presidencies have done somewhat better for markets," Caspar says. "But the risks we are watching now are protectionism, increased regulation and anti-trust enforcement."

He points out that a great deal of uncertainty exists away from the election. "A lot of noise is built up around these political events," he says. "But there is a bigger picture. We do not yet have a clear idea of the strength or extent of recovery from the pandemic."

This webinar was one of a series. To attend future events, please look out for invitations from your usual contact.

The opinions contained herein are those of the author and do not necessarily represent the house view. This document is intended to be for information purposes only. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The material is not intended to provide, and should not be relied on for, accounting, legal or tax advice, or investment recommendations. Information herein is believed to be reliable but Cazenove Capital does not warrant its completeness or accuracy. No responsibility can be accepted for errors of fact or opinion. This does not exclude or restrict any duty or liability that Cazenove Capital has to its customers under the Financial Services and Markets Act 2000 (as amended from time to time) or any other regulatory system. Cazenove Capital is part of the Schroder Group and a trading name of Schroder & Co. Registered Office at 1 London Wall Place, London EC2Y 5AU. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. For your security, communications may be taped and monitored. 

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