Despite the narrowing gap in polls, AlpineMacro maintains that “this is Donald Trump’s election to lose.”
Trump is reportedly outperforming his 2016 and 2020 showings in both national and swing-state polls, where he was underestimated in past elections.
The race remains competitive, with both candidates “within the margin of error,” which presents a challenge for Harris, given her “quasi-incumbent” status, according to the firm.
AlpineMacro notes that Harris has proven to be a stronger candidate than initially anticipated, leading in national aggregate polling and closing the gap in swing states. This has led the firm to reduce its projection of Trump winning from 60% to 55%.
AlpineMacro also comments on the broader electoral picture, stating that the most likely outcomes are either a Trump presidency with a split Congress (35%) or a Harris presidency with a split Congress (35%).
However, the analysts assign higher odds to a Republican sweep (20%) than a Democratic one (10%).
As the election draws nearer, the focus will increasingly shift to political developments alongside key economic indicators, according to AlpineMacro.
“As post-Labor Day polling becomes more accurate and frequent, we will place more weight on it, and if Harris’ polling continues trending upward, we would think her the favorite,” concluded AlpineMacro.
Elsewhere in the note, the firm noted that global financial markets are facing increasing challenges, with the risk of recession rising as tight monetary policy has entered its 28th month. In addition, “the bull market in big tech has turned parabolic and is due for a shakeout,” they added.
On the other hand, they noted that “inflation has fallen sharply, and the Fed is poised to ease at a time when political and geopolitical risks have greatly escalated.”
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