Donald Trump or Joe Biden: how different US election outcomes could play out in markets and in China

Name: Donald Trump continues to downplay severity of Covid-19 as more US officials report infections
Uploaded: 2020-10-21T16:30:14.000Z
Duration: 2 min 47 s
Description: Donald Trump continues to downplay severity of Covid-19 as more US officials report infections

A disputed US election would be unnerving for markets. A Biden victory, coupled with a split Congress, could be troubling for the US, but it would be an opportune time for China to lure investors away

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President Donald Trump and Democratic candidate Joe Biden spar in their first presidential debate on September 29. Photo: AP

Aidan Yao

Published: 12:30am, 22 Oct 2020Updated: 2:45am, 22 Oct 2020

With less than two weeks to go, the US presidential race has entered its final phase. Although Donald Trump is fighting an uphill battle and trailing Joe Biden in the polls, the sitting US president still has a lot of power to surprise. A late comeback like the one he made four years ago will be difficult this time, but not impossible.

But with the diverging performance of the two candidates, the market’s attention is increasingly turning to and focusing on two issues beyond the presidential election itself.

First, how will the shape of Congress change after the general election – specifically, will the Democrats make a clean sweep in the House and Senate? Second, will the election results be challenged, leading to a messy legal contest that creates uncertainty and volatility for markets?

Whether the presidential election will be disputed depends, first and foremost, on how close the result is. If Biden’s commanding lead in the polls translates into a landslide victory, it will be difficult for Trump and the Republicans not to concede defeat.

Here are a few scenarios of what could transpire on November 3, along with possible market reactions.

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Donald Trump continues to downplay severity of Covid-19 as more US officials report infections

First, a Biden win and a Democratic sweep in Congress: that would be positive for equity markets, removing uncertainty about policymaking in the next four years.