The 2024 US Presidential election has tightened since President Biden dropped out on July 21 and tossed his weight behind Vice President Kamala Harris to head the Democratic ticket.
At that time former President Trump had a 3.0% national lead in the Real Clear Politics polls. It’s still too early to rely too much on the polls. They’ll likely be more telling following the Presidential debate on September 10.
At that time former President Trump had a 3.0% national lead in the Real Clear Politics polls. It’s still too early to rely too much on the polls. They’ll likely be more telling following the Presidential debate on September 10.
Still, according to the average of the Real Clear Politics polls, Harris is now ahead of Trump nationally by 1.5%, 48.4% to 46.9%.
Trump has a 0.1% edge in the battleground states with small leads in Arizona, Georgia, Nevada, North Carolina, and Pennsylvania. Harris has a slight advantage in Michigan and Wisconsin. If we don’t allow for toss-ups, RCP has Trump ahead 287-251 in the Electoral College.
Turning to the prediction markets, they give Harris the slight edge. For example, PredictIt now assigns a 56% chance of Harris winning in November versus a 48% chance for Trump.
As a matter of perspective, the GOP nominee’s chances peaked at 69% on July 15 shortly after a July 13 assassination attempt was made on his life. The highest probability Harris has reached to date was 59% on August 11. The RCP average is closer at 50.5% for Harris and 48.0% for Trump.
13 Keys to the White House Framework
Historian, Professor Allan Lichtman, has correctly called every election since 1984 but one using his “Keys to the White House” framework.
He is expected to make is verdict known after Labor Day but before the September 10 debate. He doesn’t rely on polls or debate performances.
His methodology is based on the hypothesis that all elections are really a referendum on the incumbent party and they either earn another four years or they do not.
The 13 Keys are listed below. If six or more of these 13 true/false statements are false, the ruling party is predicted to lose the election. Should five or less be false, the ruling party is expected to win.
As we await Professor Lichtman’s conclusion, he has recently said that keys 1, 3, and 12 are false while 10 and 11 are leaning false. Keys 5 and 8 are still shaky although recent protests have been below 1968 Vietnam era levels.
While many pundits say RFK Jr. dropping out and supporting Trump hurts Harris, Professor Lichtman’s Keys take a different angle. Third party candidates emerge when there is widespread dissatisfaction which, of course, is a problem for the incumbent in the race.
By this logic, RFK Jr. dropping out signals there isn’t ample space for a third-party challenge to capture the widespread imagination of voters in 2024 from the two main parties. Stay tuned!
Party mandate:
After the midterm elections, the incumbent party holds more seats in the U.S. House of Representatives than after the previous midterm elections.
No primary contest:
There is no serious contest for the incumbent party nomination.
Incumbent seeking reelection:
The incumbent party candidate is the sitting president.
No third party:
There is no significant third party or independent campaign.
Strong short-term economy:
The economy is not in recession during the election campaign.
Strong long-term economy:
Real per capita economic growth during the term equals or exceeds mean growth during the previous two terms.
Major policy change:
The incumbent administration effects major changes in national policy.
No social unrest:
There is no sustained social unrest during the term.
No scandal:
The incumbent administration is untainted by major scandal.
No foreign or military failure:
The incumbent administration suffers no major failure in foreign or military affairs.
Major foreign or military success:
The incumbent administration achieves a major success in foreign or military affairs.
Charismatic incumbent:
The incumbent party candidate is charismatic or a national hero.
Uncharismatic challenger:
The challenging party candidate is not charismatic or a national hero.
Parting Thoughts
The S&P 500 has risen in 13 of the past 15 election years. It has also posted positive returns during both the Trump and Biden-Harris administrations. But elections are just part of our analysis.
We expect inflation to fall, the Fed to cut rates, and stock market leadership to broaden out on rising profits that are also broadening out by sector.
Following our latest Global Investment Committee (GIC) meeting, for a moderate risk balanced portfolio, we are recommending a Global Equities overweight of 4.5%, a Fixed Income underweight of 3.5% and a Cash underweight of 1%. For now, our tactical weightings remain generally higher for US assets versus the rest of the world.
Read more articles on the Road to the White House