Nancy Pelosi, Next President Of The United States?

IN an ideal world, markets and politics would be separate. But we don’t live in an ideal world, and the outcome of the upcoming election could have large ramifications for markets.

The stock market has done extremely well under Trump, so a Trump victory would logically pose no threat. But a Biden victory would mean higher taxes, more regulations and other policies that aren’t supportive of markets.

That’s why the election outcome is so important for investors. With the election just over two months away, where does the race presently stand?

We’ve all seen the headlines showing Joe Biden with a big lead over Donald Trump in the national polls and substantial leads in almost all of the battleground states in the state-specific polls.

Polls can be valuable, but not if you take them at face value. You have to deconstruct the polls to see what they are really saying. The results can be surprising.

The Only Polls That Count

First off, national polls don’t matter because the U.S. doesn’t have national elections. We have 50 separate elections in the states plus one in the District of Columbia.

Biden can beat Trump in California by three or four million votes, but none of those votes matter because you can only win California once. All of the excess votes are wasted.

About 40 of the 50 states (and D.C.) are foregone conclusions. They will fall predictably in either the Biden or Trump column. Only about ten states will decide the election and those polls are the ones to watch.

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