I was determined not to make the same mistake this time round that I made in the 2016 US election when Hillary Clinton was defeated by Donald Trump.
Four years ago, I went to bed assuming that she would win [admittedly as I did with the Brexit vote, which clearly demonstrates why I am not a political pundit].
I woke up at 3am and checked the results, then spent the next hour trying to do electoral college algebra to figure out how she might still win.
It was not fun.
This time, I stayed up. And I made it until 3am before losing the will to live.
Diabolical coverage on the BBC and ITV forced me to turn to CNN, where the presenters proceeded to throw so many statistics at me that I thought I was watching the Grand National.
I sit here now, after three hours of sleep and a lot of caffeine, deeply frustrated that the process is so complicated.
And I am 100% not alone. Misery does, after all, love company.
Reaction?
While journalists have the unenviable task of writing up breaking developments, which invariably means articles are out of date within hours, the financial services industry has to formulate a response to, or offer an opinion on, an as-of-yet non-event.
With Trump already declaring victory – to the horror of many within his own party – and threatening court action… this (to borrow a Biden phrase) “malarkey” is unlikely to be over any time soon.
Below is a roundup of some of the latest views of where this day [week… month…?] may take us.
Don’t invest in pollsters
Simon King, chief investment officer of Vermeer Partners: “This is tricky from a markets point of view, some may call it the nightmare scenario: indecisive, dangerous and divisive.
“We won’t see anything conclusive soon. Trump will dig his heels in and it will run and run, and as we know from past experience not in any orderly manner. This uncertainty will hurt the markets for sure; but should the bookies be right, and the White House stay red, then we’d expect a positive stock market response in the midterm, with healthcare a likely star of the show.
“Frankly, I wouldn’t be investing in any political polling companies anytime soon – I doubt anyone will be paying much attention to those again.”
An unpalatable cocktail
Randeep Somel, equities fund manager, M&G Investments: “A second-term for president Donald Trump is looking like a possibility in what has so far been a poor showing for the pollsters, who had Joe Biden up strongly in key swing states coming into the Election.
“Trump has significantly outperformed expectations, managing to hold Florida and Texas and looking increasingly confident of victory in key battlegrounds. So far, Trump’s confidence of victory is being reflected in the markets, with value stocks such as oil up in futures trading and a rally in the dollar likely if Trump holds out.
“This could change as absentee ballots are a big factor in this election which has not been the case in previous elections.
“At this stage a continuation of the status quo is likely – a Trump presidency, a Republican Senate and a Democrat House. However, absentee ballots could still favour the Democrats. This will have implications for US fiscal expansion, which would be far larger in the case of a Democrat clean sweep, given the $2trn (£1.5trn, €1.7trn) stimulus package that has been on the table.
“However, we still expect some form of fiscal stimulus irrespective of who wins the White House, as both parties put electoral manoeuvring to one side and focus on building back the US economy.”
Healthy dose of patience
Paul Eitelman, senior investment strategist, Russell Investments: “The election outcome still looks very uncertain. Futures are mixed across all regions. A more probable consequence for markets is the Senate outcome and this hangs in the balance.
“A Republican senate majority reduces the likely amount of fiscal stimulus in early 2021. The large rally in the US 10-year highlights the risks investors are seeing around stimulus.
“It looks like we will all need a healthy dose of patience this week, as results continue to roll in. A protracted period with no known result could inject volatility into financial markets. What we do know is that the U.S. and global economy are both still in the early innings of a new cyclical expansion.
“Politics offers plenty of surprises, but there are some very powerful economic forces already at work that don’t care at all about who is in the White House.”
Digesting the situation
Richard Carter, head of fixed income research, Quilter Cheviot: “Once again, the polls have underestimated the depth of support for Trump and it is possible he may well end up as the winner.
“In the short term, this is disappointing for markets and raises the prospect of several days or even weeks of uncertainty and possible legal challenges. Investors had been also been hoping that a clear victory would open the door to a massive stimulus package which would boost the US economy.
“This now appears unlikely, at least in the short-term, so we would expect to see some volatility today as markets digest the situation.
“The good news is that central banks will continue to provide large amount of supports through QE and low interest rates and this should reassure investors as we wait for news from Washington.”
