The upcoming 2024 US presidential election is expected to be a closely contested battle between Vice President Kamala Harris and former President Donald Trump.
Current national polling averages show a tight race between the two candidates, with both vying for crucial electoral votes. The electoral college system adds complexity to the race, as traditional party strongholds and swing states will play a significant role in determining the outcome.
Harris, representing the Democratic Party, has a solid base of 226 electoral votes from traditionally Democratic states. To secure the necessary 270 votes for victory, she needs to win an additional 44 votes from battleground states. Her most straightforward path involves reclaiming key Midwest states like Michigan, Wisconsin, and Pennsylvania, which collectively offer 44 electoral votes. Current polling suggests Harris has a slight advantage in Michigan and Wisconsin, but Pennsylvania remains a closely contested state. Winning Pennsylvania, with its 19 electoral votes, could greatly enhance either candidate's chances.
In addition to the Midwest, Harris may also focus on the Sun Belt states—Arizona, Nevada, and Georgia—where demographic shifts favor Democratic candidates. These states were narrowly won in the 2020 election, and retaining them would provide Harris with the flexibility to secure her victory by winning just one more swing state. The changing voter demographics in these regions, particularly among younger and Hispanic voters, could be crucial in her campaign strategy.
On the Republican side, Donald Trump begins with 219 electoral votes from traditionally Republican states. To reach the 270-vote threshold, he needs to secure an additional 51 votes from battleground states. Winning Pennsylvania is crucial for Trump, as it has historically been a key battleground state. If he can claim Pennsylvania, he will also need to maintain control of North Carolina and flip Georgia to meet his electoral goal. However, if he fails to win Pennsylvania, Trump faces a challenging path, needing to capture nearly all of the Sun Belt states, along with one additional traditional Midwest state.
As the election approaches, market participants are closely monitoring the political landscape and its implications for the US dollar and major indices like the Nasdaq 100. The US dollar has shown signs of strength, but its performance is highly sensitive to the electoral outcome. Any early results favoring Harris in key states like Georgia, North Carolina, or Pennsylvania could trigger significant market repositioning.
The Nasdaq 100 index remains fragile due to the uncertainty surrounding the election. Investors are cautious, and the wait for political clarity dampens risk-taking. The index has recently broken below an upward trendline, and a failure to overcome immediate resistance levels could lead to further declines. The relative strength index (RSI) on the daily chart has also dipped below the mid-line for the first time since September, indicating a loss of upside momentum.
Volatility is expected to increase as uncertainties are resolved in the lead-up to the election. The market's reaction to the election results will likely be swift, with traders positioning themselves based on the perceived likelihood of a Harris or Trump presidency. The outcome in Pennsylvania will be particularly important, as it holds the highest number of electoral votes among the battleground states.
The stakes are high for both candidates as the election day approaches, and the implications for the financial markets are significant. Investors and analysts will closely watch the results, as they could reshape the economic landscape and influence market trends in the future.