Source: CICC Point
Trump Still Leading in Swing States. As of November 1, Trump still leads in national polls, with a support rate of 48.4%, about 0.3 percentage points ahead of Harris. In comparison, during the same period of the 2016 and 2020 elections, Trump lagged behind Hillary and Biden by 7.8 and 1.5 percentage points, respectively. In terms of swing states, Trump maintains his lead, but it has narrowed slightly compared to a week ago, while Harris has overtaken Michigan and Wisconsin. Referring to current polls, if it is assumed that the electoral votes are allocated in full accordance with the current polls in each state, then Trump and Harris will win 287 and 251 votes respectively (270 votes are the threshold for winning).
Chart: Trump maintains lead, but slightly narrowed compared to a week ago, while Harris overtook Michigan and Wisconsin
From the faster-changing betting market, Trump's betting odds advantage has narrowed significantly recently. According to RCP's comprehensive data from various platforms, as of November 2, 2024, Trump and Harris' betting odds were 54.7% vs. 44.1%, which was significantly narrowed from 63.9% at the end of October.
Chart: Trump and Harris betting odds are 54.7% vs. 44.1%, which is significantly narrower than 63.9% at the end of October
The proportion of early voting and mail-in ballots this year is expected to remain as high as 65%. There are nearly 170 million registered voters in the United States, and the voter turnout in the 2020 election was about 66% (the number of votes cast accounted for the number of eligible voters), the highest level in more than a century. Based on our estimate of 245 million eligible voters in 2024 and a 66% voter turnout in 2020, the total number of votes in 2024 may reach 160 million. As of November 1, 70 million early votes (including in-person voting and mail-in voting), accounting for 43% of the total votes, if the mail-in ballots that have not yet been returned (but these ballots may not be fully returned) are included, the number of early votes may reach 100 million, accounting for 65% of the estimated total votes. The proportion of early voting in the 2020 and 2016 elections was 64% and 36.6% respectively, which is still at a high level this year.
Chart: The estimated total number of votes in 2024 is 160 million votes
Chart: The current estimated proportion of early voting is at a high level
Among early voters, the proportion of registered Democratic Party members is higher than that of Republican Party members, but this is of limited reference value as the final result. According to UF Election Lab data, among the current 70 million early votes, the proportion of registered Democratic and Republican Party members is 38.2% and 36.1%, respectively, with little difference. CNBC data statistics show that both are 40%, which is also relatively close. Among the early votes, Democrats voted more by mail (Democrats 42.6% vs. Republicans 33.5%), while Republicans voted more in person (Republicans 39.7% vs. Democrats 31.7%). However, in some swing states, especially Pennsylvania, which is the focus of this time, UF Election Lab estimates that 56% of early voters are Democrats, which is significantly higher than the 33% of Republicans. Harris seems to have an advantage. However, early voting does not mean early counting of votes, and registered party members do not constitute the majority of American voters. The early voting rate in the key swing state of Pennsylvania is not high (24%), so it is not reliable to judge the leading advantage only based on early voting and party affiliation in early voting.
Chart: According to the party registration of early voters in swing states, Harris has a larger lead, but the election results are still very uncertain
Chart: Early voting parties in each state
As the voting day on November 5 approaches, how to track the real-time election situation and when the results will be released are issues that everyone is very concerned about.
1. How long does the voting last? It will open in sequence from east to west according to the time zone, and will basically close at noon on the 6th Beijing time
Due to different time zones, the opening and closing times of polling stations across the United States on November 5th are also different, and they are generally closed in sequence from east to west. For example, the first polling stations to close included parts of Indiana and Kentucky, which closed at 6 p.m. Eastern Time on November 5 (corresponding to 6 a.m. Beijing Time on the 6th). The last state to close was Alaska, which closed from 12 noon to 1 p.m. Beijing Time on the 6th.
The voting deadlines for the seven important swing states are(Beijing Time): Georgia, 7 a.m. on the 6th; North Carolina, 7:30 a.m. on the 6th; Pennsylvania, 8 a.m. on the 6th; Michigan, 8-9 a.m. on the 6th; Arizona, 9 a.m. on the 6th; Wisconsin, 9 a.m. on the 6th; Nevada, 10 a.m. on the 6th.
Chart: Voting stations in Nevada, the last swing state, closed at 10 a.m. on the 6th, Beijing time
2. When will the results be released? Or in the evening of the 6th, Beijing time
The counting rules and time of each state are different. For example, some states count votes while voting on the voting day, and some states allow early voting to be counted before the voting day. Shortly after the polling stations in each state closed, a considerable part of the voting results had been counted, and the remaining votes usually did not affect the overall situation unless the election was very close. Therefore, under normal circumstances, the final results will generally not be released later than late at night on the voting day, that is, noon on the 6th Beijing time. However, if there are many mail-in ballots or a recount is triggered, the results may be delayed. From the fact that mail-in ballots account for a large proportion this time and the rules that some swing states do not allow early counting, the final results may be slightly delayed, but they can basically be released in the afternoon or evening of the 6th Beijing time. If the results of some key swing states are very close and need to be recounted, the results will also be delayed. Specifically for the 7 most critical swing states, the following are the specific counting times and details (all Beijing time):
► Georgia: It may be the first swing state to announce the results. Georgia has a high proportion of early voting (80%), and has been processing mail-in ballots since October 21, stipulating that mail-in ballots must be mailed before the polling stations close. It is expected that 90% of the counting will be completed before 10:30 am Beijing time on the 6th. Georgia does not have an automatic recount trigger, but candidates can apply for a recount if the final difference is less than or equal to 0.5% of the total votes.
► North Carolina: Results may be available at noon on the 6th. North Carolina also has a high rate of early voting (75%), and this year's new rules require that mail-in ballots must be received before Election Day. Early voting and Election Day voting results will be announced between 7:30 and 9:30 a.m. and 8:30 and 1 p.m. Beijing time on the 6th, respectively. North Carolina also does not have an automatic recount trigger, but candidates can apply for a recount if the final difference is less than or equal to 0.5% of the total votes or 10,000 votes.
► Michigan: Results may be available at noon on the 6th. Most districts in Michigan began processing mail-in ballots on October 28, and mail-in ballots must be received before the polls close on Election Day. Most precincts will finish counting by the morning of the 6th, but full results won't be available until the evening. If the statewide margin of victory is less than 2,000 votes, an automatic recount will be triggered.
► Pennsylvania: May be announced in the afternoon or evening of the 6th. Mail-in ballots must be received before Election Day, and processing begins at 7 a.m. on Election Day. Early counting is not allowed, so counting may take longer. If the statewide margin of victory is less than or equal to 0.5%, an automatic recount will be triggered.
► Wisconsin: May be announced in the afternoon or evening of the 6th. Mail-in ballots must be received before Election Day, and early counting is not allowed, just like Pennsylvania, but election workers must count overnight to speed up the release of votes. Historically, the counting is usually completed before 1 p.m. Wisconsin does not have a trigger for an automatic recount, but candidates can request a recount if the final margin is less than or equal to 1%.
► Arizona: Preliminary results may be released in the morning, but full results are expected by 5 p.m. Most voters vote by mail and early counting is allowed, but votes cast on Election Day will not be counted until after the polls close. Preliminary results are usually released around 10 a.m., but the overall release time is extended for two reasons: 1) the number of votes cast on Election Day must be calculated and announced before the official count, and 2) Maricopa County, the state's largest county, estimates that a complete count of votes cast at polling stations on Election Day may not be announced until 5 p.m. The trigger threshold for an automatic recount is 0.5%.
► Nevada: It may take several days to count mail-in ballots. In-person voting results will be released a few hours after the official polls close, but it will still take several days to count mail-in ballots. Ballots must be postmarked before Election Day, and mail-in ballots are counted after they are received, but because Nevada allows ballots to be received before November 9, the counting time is longer.
3. How to watch the game? Pennsylvania is the "match point", Harris "must" win Pennsylvania, Trump has more ways to win
Due to the unique electoral vote mechanism in the United States and the stable "base" of the two parties, most states play the role of "going through the motions" in the election. For example, according to the 270towin polls and the predictions of different models, Harris has basically locked in 226 votes and Trump has locked in 219 votes (270 electoral votes are needed to win the election).
On the contrary, some so-called "swing states" with unclear positions and stalemates have become the winners and losers of the election. There are seven swing states in this election. Blue Wall states include Michigan (15, -0.8%, the former refers to the number of electoral votes, the latter refers to the extent to which Trump leads Harris in the polls, the same below), Pennsylvania (19, 0.4%), and Wisconsin (10, -0.3%), with a total of 44 votes; the southern swing states of the "Sun Belt" include Georgia (16, 2.6%), North Carolina (16, 1.5%), Arizona (11, 2.3%), and Nevada (6, 1.5%), with a total of 49 votes. Among them, Pennsylvania has 19 electoral votes, making it the "match point" of this election.
From the current possibilities and paths to victory, Harris "must" win Pennsylvania, otherwise it will be almost difficult to win the election; Pennsylvania is equally important to Trump, but there are other paths, at least win a blue wall state (not necessarily Pennsylvania). Here are the specific paths:
► Trump's winning path: Trump only wins the "Sun Belt" swing states, which is not enough to reach 270 votes. He needs to win at least one blue wall state. 1) If Trump wins Pennsylvania, he only needs to win Georgia and Arizona in the Sun Belt (both of which are ahead by more than 2% in Republican polls), and North Carolina or Nevada (both of which are ahead by 1.5% in Republican polls) to win. 2) If Trump loses Pennsylvania, another more likely path is to win all four Sun Belt states and Wisconsin or Michigan, among which the Democratic Party's lead in Wisconsin is even lower (leading by 0.3%).
► Harris's path to victory: 1) If Harris wins all blue states, especially Pennsylvania, and the number of votes in traditional blue states that are almost locked in has just reached 270, this is also the path that her campaign is more focused on at present. Of the three blue states, the Democratic Party has a slight lead in the polls in Michigan and Wisconsin. Pennsylvania is more uncertain, so it is particularly important. 2) If Harris wins Pennsylvania but loses Michigan or Wisconsin, it is necessary to pay attention to whether North Carolina can be reversed (compared with other states, the Republican lead rate is lower). 3) If Harris loses Pennsylvania, or loses Michigan and Wisconsin at the same time, it will be very difficult to win by winning at least two swing states in the Sun Belt.
Chart: Pennsylvania is the key. Harris’s loss in Pennsylvania will significantly increase the challenge, and Trump has more paths to victory
4. Possible surprises? A tie or non-recognition of the result
There are three possible scenarios for a tie in this election[1]. In this case, the House of Representatives and the Senate need to vote together to elect the president and vice president. The result may be more favorable to the Republican Party, but it will take longer. The three possibilities are: 1) Harris wins Georgia, Arizona, Wisconsin, and Nevada; 2) Harris wins in Georgia, North Carolina, and Arizona; 3) Harris wins North Carolina, Arizona, Wisconsin, and Nevada. If the votes are tied, a contingency election will be held. The House of Representatives will elect the president. Representatives from each state will form a delegation and cast one vote after the total vote. The winner will be 26 votes or more in the 50 states in the United States. The Senate will elect the vice president. Each senator will cast one vote. The winner will be 51 votes or more. The elections of the House of Representatives and the Senate do not interfere with each other, and it is possible that the president and vice president belong to different parties. At that time, the ownership of the two houses of Congress in this election will play a key role.
The second surprise is that the losing party refuses to accept the election results. Generally, after the results are released, the losing party will issue a statement admitting defeat and accepting the election results. However, if the losing party does not recognize the election results in a low-probability event, it may cause greater turmoil. For example, Trump once questioned the results in 2020, which triggered the Capitol Hill incident in early 2021.
When thinking about the impact of the election results on various assets, in addition to the effect of the policy itself, it is also necessary to comprehensively consider the factors of expectations and policy rhythm: On the one hand, the market has already reacted to Trump's transactions in advance (such as US bonds, US dollars, gold, traditional energy and financial stocks, Bitcoin, Mexico and Vietnam exchange rates, etc.), but the degree of inclusion of different assets is different. At present, US stocks, US bonds, US dollars, gold, Bitcoin and RMB exchange rates have relatively more expectations for Trump's transactions, but copper, crude oil and China's export chain have less expectations; on the other hand, the actual promotion of policies also takes time, and the order and difficulty of different policies are different.
Chart: Assets shifted to Trump trade, but have recently given back
Chart: US stocks, US bonds, US dollars, gold, Bitcoin and RMB exchange rates have relatively more Trump victory trades, but copper, crude oil and Chinese export chain stocks have relatively less
Based on this, our overall trading strategy is: 1) If the result is stronger than expected, that is, "Republican victory" (President Trump + Republicans control both houses of Congress), then the current "Trump deal" will still have a period of upward surge and amplitude, but will also enter a period of suspension waiting for the actual implementation of the policy, similar to the surge after the 2016 election and the gradual suspension after January 2017; 2) If the result is lower than expected, that is, other situations except "Republican victory", especially Harris winning the election, then all transactions will be directly reversed. Specifically,
Chart: Experience from 2016: “Trump Deal” → Suspended after policy obstruction → Restarted after tax reform
► “Republican victory” will strengthen expectations for the advancement of Trump’s policies, forcing some previously hesitant investors to quickly chase highs, which means that there is still room for Trump deals as a whole, and assets that were previously not factored in expectations will react more. 1) US stocks, US bonds, the US dollar and Bitcoin may still rise in the short term, similar to the Trump deal in 2016, except that the rebound will be lower than the previous round. After a period of time, the transaction may be suspended or reversed. 2) On the contrary, copper, crude oil and China's export chain have the risk of compensating for insufficient expectations. Strong cyclical and resource-based risk assets such as copper and oil may rebound under the expectation of re-inflation; gold, which is based on uncertainty hedging, may reverse; China's export chain may be marginally under pressure, and industries with low exports to the United States and high imports from China may have relative resilience. ► Other combinations except "Republican victory" may lead to a reversal of Trump's deal. For example, Harris's victory will directly lead to a reversal of Trump's deal, such as the US dollar and US bond interest rates, gold may pull back, and US stocks may even face certain pressure, while other assets damaged by Trump's policies will be relieved of pressure. If Trump wins but the Democrats control the House of Representatives, his incremental stimulus policy may be hindered, which will also cause a reversal of US bond interest rates and the US dollar. US stocks will also be under pressure, but the export chain will still be under pressure, and gold will continue to trade tariffs and geopolitical uncertainties.
In summary, the overall "do the opposite" trading idea has a greater chance of success, but it takes more time to wait for a "Republican victory" and let the bullet fly for a while longer. US bonds provide trading opportunities after rising; gold pays attention to short-term overdraft risks, and can partially profit from rising; US stocks and the US dollar are positive in the long term, but pay attention to short-term disturbances and wait for better opportunities; export chains guard against risks; copper and oil are neutral and bullish, waiting for catalysts.
Chart: Impact on assets under different scenarios: Scenario 1: Demand and inflation rise simultaneously; Scenario 2 and 3: Maintain the status quo; Scenario 4: Stagflation
Risks
The election situation is still uncertain. The poll data may have accuracy issues. The speed and progress of policy introduction may not be in line with market expectations.
[1]https://www.aljazeera.com/news/2024/10/31/route-to-270-how-trump-or-harris-would-win-the-us-election
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