Here’s how the presidential election 2020 is unfolding in its final days: A massive early voter turnout is outpacing that of 2016, an estimated 11 million more Democrats than Republicans have requested mail-in ballots, and both President Donald Trump and former Vice President Joe Biden spent Thursday barnstorming the state of Florida.
“We recognize this is a highly contested race,” said Nasdaq CEO Adena Friedman in a webcast interview on Thursday.
Speaking on a panel on “The Economics of the 2020 Election” sponsored by Nasdaq, Jim O’Sullivan, chief U.S. macro economist at TD Securities, noted the final outcome of the race offers a number of potential pros and cons for the economy.
A Biden win is seen as less favorable for business because of a higher proposed corporate tax rate plan, he said. On the other hand, Trump’s trade wars have been “a big negative for the economy,” he said, and Biden is expected to be a more avid global trade supporter.
More concerning, O’Sullivan said, is what happens in key Senate elections, and whether or not a Democratic “blue wave” wins the majority there. That’s important in part because while there is a broad agreement in Congress that another U.S. stimulus package is needed to underpin the economy, a Democratic majority in the Senate is more likely to get it passed, he said.
Republicans currently hold the majority of Senate seats by a 53-47 margin.
O’Sullivan said he’s forecasting a U.S. growth rate of 3% to 3.5% over the next year, but cautioned “that’s depending on another round of stimulus.” The economy rebounded in the third quarter, but overall growth is down versus last year’s and U.S. employment remains under pressure.
The Commerce Department Thursday reported that GDP rose at an annualized rate of 33.1% between July and September, but that compared with a decline of 31.4% in the second quarter and a drop of 5.0% in the first quarter.
At the same time, “This race has stopped becoming a choice and has become a referendum on COVID,” said Matt Rhoades, co-CEO of the Republican-leaning CGCN Group. The virus has spiked in both the U.S. and Europe throughout the campaign’s final days.
Whoever wins, the next president will inherit several critical and immediate tasks, said Phil Mackintosh, chief economist at Nasdaq. The first will be to get people healthy, then to get a stimulus package passed, and finally, to deal with the huge amount of debt that is coming due.
Panelists agreed it’s unlikely the morning of November 4 will reveal who will win the presidential race, and the final outcome of the Senate contests may take even longer to determine.
The fear is that if there is a population divided, there might be a period of unrest, said Friedman. That would be challenging for cities, small business and law enforcement to manage if there is a protracted decision, she said.
Strategist Patti Solis Doyle, partner with the Brunswick Group, pointed out that since more Republicans are expected to vote on the actual day of the election, November 3, it’s likely those in-person votes will be known before mail-in votes are counted. That means Republicans might look like early winners, but Democrats could pull ahead when mail-in votes are counted later, she said.
Given the outlook for several highly contested Senate races, Rhoades predicted a run-off in Georgia, and possibly other states, which means “we may not know until January 6 who controls the Senate.”
Mackintosh said the options markets are “forecasting weeks, if not months, of uncertainty. No one is really sure what is going to happen in the next few months.”