US MARKET INTELLIGENCE

ELECTION UPDATE

NOVEMBER 3, 2024

HYPERLINKS TO SECTIONS

ELECTION OVERVIEW
TRADE IDEAS / JPM RESEARCH
ELECTION PROBABILITIES / CALENDAR
OUTCOME MATRICES / THEMES / SECTORS
POLICY ANALYSIS

WHAT HAS CHANGED

Since last week, Harris is seeing a boost in the polls, highlighted by the Selzer Poll of Iowa where
some are using as a proxy for performance among the Blue Wall battleground states (MI, PA, and
WI). The Selzer Poll shows Harris winning in Iowa by 3 points; Trump had an 18-point lead over
Biden in the June release and a 4-point lead in the September release (Des Moines Register).
Trump won Iowa by 9.4pts in 2016 and 8.2pts in 2020, driven by Independent voters. Looking
nationally, Fox News reports that Harris is leading in Georgia, Nevada, North Carolina, and
Wisconsin while Trump leads in Arizona; this implies the candidates are tied in Michigan and
Pennsylvania (Fox News).

What is driving Harris’s nascent outperformance in the Iowa poll? It is primarily women and older
voters (>65 years old). Independent voters have shifted their support from Trump to Harris. Harris
is winning female Independents by 28-pts, 57% to 29% up from the Sept release where Harris led
40% to 35%. For men, Trump leads by 10pts, down from his 13pt lead in the Sept release. For
older voters, Harris is winning women 63% to 28% and men by 47% to 45%. Reasons for this shift
may include views on abortion, ACA (“Obamacare”), and Social Security where Harris is viewed
as protecting all 3 versus Trump viewed as restricting, removing, or cutting funding for the
programs. Further, comments from both Trump and Musk point to “temporary hardship” from their
planned spending cuts and tariff plans (CNBC; The Hill); the economy is the primary issue for
voters in this election.

Separately, abortion rights are on the ballot in 10 states: Arizona, Colorado, Florida, Maryland,
Missouri, Montana, Nebraska, Nevada, New York, and South Dakota. Post, Roe v. Wade,
Democrats have won every election with abortion rights on the ballot (Forbes; Politico; NBC). This
includes ballot initiatives in California, Kansas, Kentucky, Michigan, and Ohio; gubernatorial
elections in Arizona, Kentucky, Michigan, Pennsylvania, and Wisconsin; state-level elections in
North Carolina, Virginia, and Wisconsin. Perhaps this phenomenon is driving Harris’s lead among
women (WaPo).

In final polls, NYT has the candidates tied in MI and PA with Harris leading in GA, NC, NV, and
WI, and Trump leading in AZ (NYT). The Real Clear Politics average has Trump leading by 0.2pts
And 1.0pts across the battleground states (RCP). This election will be skewed by turnout and in
early voting more than 75mm people have cast ballots; in 2020, there were 154.6mm ballots cast
for the entire election with ~100mm doing early voting.

NOV 3 POLLING AVERAGE (SOURCE: FIVETHIRTYEIGHT.COM)

BETTING MARKET ODDS (SOURCE: PREDICTIT.ORG)

Tracking the Senate race, 5 of 7 battleground states (GA and NC do not) have Senatorial
elections and Dems are leading in all of those states, according to Real Clear Politics (RCP). It is
possible that the Democrats’ lead in the Senate elections could boost Harris as voters fail to split
tickets.
WHAT DOES THIS ALL MEAN FOR MARKETS? After both 2016 and 2020, Financials and Tech
were the largest outperformers. The SPX rallied into year-end with RTY outperforming; Nasdaq
outperformed NDX, in both cases. Growth, Quality, and Size factors underperformed both times.
The US Market Intel view is to be long into year-end, buying any/all dips.

2016 & 2020 ELECTION RETURNS

WHAT IS THE ELECTION NIGHT TIMELINE? CNN has a timeline for the battleground states,
summarized below (CNN), with electoral votes (“EVs”) denoted in brackets.
• Arizona [11 EVs] – polls close at 9pm ET. Results do not begin to be reported until 10pm
ET with ballots processed as they come in. Election day mail-in ballots could take multiple
days to count. In 2020, the state was called early Weds morning.

• Georgia [16] – polls close at 7pm ET. Early voting and mail-in ballots will be the first
counted with all results expected to be reported on election night. Ballot processing began
on Oct 21. In 2020, the state was called on Nov 19 vs. Nov 3 Election Day.

• Michigan [15] – polls close at 9pm ET. Ballot processing began on Oct 28. All votes will
be counted and reported by midday Weds with larger counties finishing earlier. In 2020,
the state was called Weds night.

• Nevada [6] – polls close at 10pm ET. Ballot processing began on Oct 21. Results do not
begin until all polling sites are closes with ballots counted if they are post-marked by Nov
5 and arrive by Nov 9. In 2020, the state was called on Saturday (Nov 7).

• North Carolina [16] – polls close at 7.30pm ET. Ballot processing began on Oct 1 and
mail-in ballots will be processed first, followed by early voters, and then Election Day
votes. The vast majority of ballots will be counted on Election Day but given the impact of
Hurricane Helene, some mail-in ballots could be counted late. In 2020, the state was
called more than a week later, on Friday (Nov 13).

• Pennsylvania [19] – polls close at 8pm. Mail-in ballots are not allowed to be processed
until Election Day and that means the final reporting may take multiple days. In 2020, the
state was called on Saturday (Nov 7).

• Wisconsin [10] – polls close at 9pm ET. Look for results to conclude no later than midday
on Wednesday. In 2020, the state was called Weds afternoon.

JOYCE CHANG: TEN THEMES TO TRACK FOR 2024 US ELECTION - (full note is here)
• US presidential race remains too close to call and hinges on voter turnout while investor
consensus for a divided Congress could be challenged.
• Voter sentiment will be driven by which candidate can best portray themselves as the
change candidate while polling was criticized as unreliable and not predictive.
• Pennsylvania still seen as the determinative battleground state, but if Harris wins North
Carolina, it could be an early indicator of the election outcome.
 • Timeline for certifying election results could take days for the presidential race and weeks
for the House races.
• Trump 2.0 scenario would bring a more unrestrained Trump, with increased use of tariffs
and policies to “escalate to de-escalate” not yet priced.
• Consequences of a Republican sweep underestimated with material implications for
domestic and foreign policy.
• US election outcome seen as a litmus test on whether moderate centrist views can hold
as the bases of both parties are turning more populist on the margin.
• First 100 days of Trump 2.0 could focus on executive authority related to immigration,
energy, and deregulation along with the phased introduction of tariffs.
• Expect more hawkish foreign policy under both Harris and Trump.
• Harris is a different candidate from 2020 and will govern from the center if elected.

POLLING: PRESIDENTIAL RACE

When looking at polls, Harris has a +0.2 lead (down from October 26, +1.3), according to
FiveThirtyEight. Polls typically have a 2-3% margin of error, so the candidates can still be
considered in a statistical tie. Below are a series of charts and battleground state averages, data
is as of Nov 3, 2024.

• ARIZONA (11 electoral votes) – Trump leads by 2.6 points, 49.0% to 46.4%. Trump up
0.2pts WoW.

• GEORGIA (16 votes) – Trump leads by 1.5 points, 48.5% to 47.0%. Trump down 0.1pts
WoW.

• MICHIGAN (15 votes) – Harris leads by 0.7 points, 47.8% to 47.1%. Trump down 0.3
WoW.

• NEVADA (6 votes) – Trump leads by 0.7 points, 47.8% to 47.2%. Trump up 0.7pts WoW.

• NORTH CAROLINA (16 votes) – Trump leads by 1.3 points, 48.4% to 47.1%. Trump flat
WoW.

• PENNSYLVANIA (19 votes) – Trump leads by 0.2 points, 47.9% to 47.6%. Trump down
0.2pts WoW.

• WISCONSIN (10 votes) – Harris leads by 0.8 points, 48.1% to 47.4%. Trump down 0.6
WoW
NOVEMBER 3 NATIONAL ELECTION POLL

Source: FiveThirtyEight.com (here)

NOVEMBER 3 BETTING ODDS

POLLING: SENATE RACE
Currently, the Senate has 51 Democrats (including 3 Independents) and 49 Republicans. This
election cycle has 34 seats up for election, including a special election in Nebraska. Democrats
hold 23 of the 34 seats up for election. In order to gain control of the Senate, the GOP will need to
net gain 2 seats. Sen. Manchin (D) is resigning from his seat in West Virginia and that is expected
to flip Republican; in 2020, Trump won WV 68.6% to Biden’s 29.7%. Based on the current poll
data from the Hill, Dem will need to win all Dem lean elections, both of the toss-up elections and
one of the currently lean GOP elections for majority. Currently, The Hill sees a 74% chance of
GOP winning the Senate vs. 26% of Dem winning, data is as of Nov 2, 2024.
• The key races: Florida (GOP lean), Michigan (Dem lean), Montana (GOP lean), Nevada
(Dem lean), Ohio (toss-up), Pennsylvania (Dem lean), Texas (GOP lean), and Wisconsin
(Dem lean).

o FLORIDA – Rick Scott (R) is an incumber seeking a second term in a state that
Trump won in both 2016 and 2020 elections, by 1pts and 3pts, respectively. Rick
Scott (R) will face off Debbie Mucarsel-Powell. The Hill data suggests that
chances for Scott (R) to win is 76% vs. 24% for Mucarsel-Powell (D).

o OHIO – Sherrod Brown (D) is an incumbent seeking a fourth term in a state that
Trump won in both 2016 and 2020 election, by ~8pts. Brown leads in most polls,
 but this state is considered a toss-up given the trend to vote Republican in federal
elections. The Hill data suggests that chances for Moreno (R) to win is 56% vs.
44% for Brown (D).

o MICHIGAN - Incumbent Democratic Senator Debbie Stabenow is retiring, setting

the stage for Michigan's first open Senate race for this seat since 1994. Elissa
Slotkin (D) will face off against Mike Rogers (R). Biden won Michigan by 3ps in
2020. The Hill data suggests that chances for Slotkin (D) to win is 67% vs. 33%
for Roger (R).

o MONTANA – Jon Tester (D) will face off against Tim Sheehy (R). Trump won
Montana by 16ps in 2020. The Hill data suggests that chances for Sheehy (R) to
win is 67% vs. 33% for Tester (D).

POLLING: HOUSE RACE

There are 435 members of the House of Representatives with every seat up for election.
Currently, Republicans hold 218 seats and Democrats 213 seats. There are 4 seats vacant due to
retirement. One factor in House races that is less impactful for the Senate is re-districting. Every
10 years the US updates its census which affects voting districts. The 2020 census led to the
2022 voting maps, where several maps have been challenged for their legality. Alabama, Georgia,
Louisiana, New York, and North Carolina are the states where legal action changed the voting
map. There is pending litigation that may change maps in Florida, Ohio, South Carolina, and Utah.
Currently, The Hill sees a 53% chance of GOP winning the House vs. 46% of Dem winning.

• According to Ballotpedia, there are 58 battleground districts across 26 states. Their map is
below (Ballotpedia).
DATA INTELLIGENCE: SOCIAL MEDIA SENTIMENT UPDATES – you may contact the team
here
• After more than a month of Trump lead, Social Media Sentiment over the last rolling three
days (i.e. latest bar in the first chart below) has now switched towards a more neutral set-
up, hinting to a slight Harris/Democrats comeback.
• With a few days to go until the election, we now turn our Social Media Sentiment analysis
to swing states: note Harris would need to gain 44 Electoral College Votes here, with the
more likely combination to be Michigan, Wisconsin, and Pennsylvania. Based on
Polls/Social Media Sentiment, Harris seems on track to win Michigan, while she does not
seem to be in a position to overcome the gap in North Carolina. This leaves her in a
position of needing to win both Wisconsin and Pennsylvania, which appear to be highly
contested at the moment. Given that Trump could reach the required number of Electoral
College Votes by winning just one of these two states, Harris’ path to victory appears
narrower than Trump’s – although everything remains well within polls’ margin of error.
• Harris would need to gain 44 Electoral College Votes, most likely coming from Michigan,
Wisconsin, and Pennsylvania…
 Source: JPM Data Intelligence

Social Media Sentiment Score vs US Presidential Polls Change (5 Days Lag) –

National

NEWS ARTICLES YOU MAY FIND INTERESTING

• Nearly half of 2020's electorate have already cast ballots in 2024 (Axios)
• What to know about Trump's policy proposals (Axios)
• What a Trump-empowered RFK Jr. could do on health care (Axios)
• How Donald Trump is laying the groundwork to dispute the election results – again (CNN)
• Republicans’ Closing Argument: We Will Wreck the Economy (BBG)
• Taxes, Tariffs and More: 5 Key Economic Stakes of the US Election (BBG)
• Trump’s Immigration Policy Would Make Food Inflation Even Worse (BBG)
• Why Trump’s Plan to Escalate Tariffs Has So Many Haters (BBG)
• Harris Hits GOP on Chips; Trump Leans Into Racial Divides (BBG)
• Harris defends CHIPS Act after House Speaker Johnson suggests GOP would try to
repeal law (CNBC)
• The next U.S. president could inherit a booming economy. That’s a daunting challenge.
(CNBC)
• Trump, Harris neck and neck in battleground states with under 48 hours until Election
Day, polls find (Fox News)
 • RFK Jr. says Trump White House will get fluoride out of drinking water (Fox News)
• Fetterman unpacks Pennsylvania days before the election (Politico)
• Trump says migrants caused a ‘surge in crime’ in a small Wisconsin city. Its residents
reject that. (Politico)
• Kari Lake is struggling to match Trump’s numbers in Arizona. She doesn’t believe the
polls. (Politico)
• California’s Central Valley could deliver the House to Democrats. Latino voters could hold
the key. (Politico)
• EU braces for two-front trade war with US and China (Politico)
• If Trump wins, Europe will have to adjust its stance on Ukraine, Orbán says (Politico)
• Allan Lichtman vs. Nate Silver: Who will accurately predict the 2024 election? (USA
Today)
• Voters Are Poised to Reshape Abortion Access, From Missouri to Montana (WSJ)
• Lutnick Consults With Musk, Kushner, Wall Street in Rush to Staff Trump White House
(WSJ)
• The Elusive Voters Who Could Make or Break the Election (WSJ)
• Immigration Roils Election in Pennsylvania, 1,500 Miles From Border (WSJ)
• Who Will Win the U.S. House? Watch These Tight Races (WSJ)

TRADE IDEAS

CROSS-ASSET VIEWS
• RATES (here) - On election impacts, Jay argues that there is little room for a major
amount of fiscal expansion in a divided government, irrespective of who occupies the
White House.

• Harris/Split congress: An extension of the current administration, the team

thinks her election in a split Congress is unlikely to have a major impact on
Treasury yields.
• .
• Trump/Split congress: Trump’s tariff policy would clearly be inflationary: the
10% universal tariff represents a 1.5% increase in inflation and the 60% China
tariff represents a 1.1% increase in inflation. In addition, elevated volatility under
the Trump administration could also lead to higher term premium. Jay and team
wrote: “Taken together, we [Jay and team] think the tax on consumption and hit to
business confidence should outweigh the prospects of higher prices from tariffs,
and this should mean lower nominal and real rates at the front end. Meanwhile,
 longer out the curve, we [Jay and team] think long-end yields would move
somewhat higher, as the expectations of lower growth would be more than offset
by the rise in term premium.”

• Sweep congress: Jay and team think if “either Harris or Trump wins amid a
Congressional sweep, this should create more pressure on Treasury yields, as
the fiscal concerns that briefly captured market participants’ attention a year ago
would likely come back to the forefront, driving the Treasury curve bearishly
steeper.”

• CREDIT IMPACTS OF HARRIS’ ECONOMIC PROPOSALS (here)

• Incremental policy proposals remain modest for now. The policies proposed
include higher corporate taxes, increased regulation, and support for clean energy
and affordable housing. The expectation is that a Democratic administration
would continue the current focus on anti-trust enforcement. Support for consumer
stimulus and healthcare expansion are other key policy goals.

• There are macro and micro implications of these policies. Higher corporate taxes
and increased regulation could impact corporate profitability and investment, while
consumer stimulus measures and support for clean energy could have offsetting
impacts. See below for sector discussions around the future of ACA subsidies in
Healthcare, affordable housing initiatives, the impacts of tariffs on different
sectors, and a focus on clean energy in Utilities and Energy and other topics.

• Sector distribution remarkably balanced. We also show our sector analysts’ view
on which administration’s policies – Harris or Trump – would be more favorable
for each of the sectors within HG and HY credit. We caveat this exercise by noting
that the uncertainty and nuance around how policies could evolve, and the
 potential distribution of intended and unintended consequences thereof, are
extremely high. Nonetheless, the broad takeaway is that both candidates have
different focuses and their proposals could impact sectors in various ways. We
believe six sectors would be marginally better off under former President Trump’s
proposals, and six would be marginally better off under Vice President Harris’
proposals. The remaining five sectors are toss-ups in our analysts’ view. Thus, we
would again caution investors that, at least for credit, the Fed matters more than
the White House in our view over the medium term. Furthermore, while we can
extrapolate the general potential impacts of certain policy proposals, the devil is
very much in the details as to how a particular piece of legislation could eventually
come together and impact the economy, markets and specific companies.

• CREDIT IMPACT OF TRUMP’ ECONOMIC PROPOSALS (here)

• Overall, we believe the macro impacts/risks are more consequential for credit
than the micro. If tariffs lead to higher inflation and therefore higher yields, this
could be supportive for spreads, unless it comes with greater UST volatility and
fears of fiscal sustainability. Lower corporate taxes to the extent being discussed
should have little impact on credit. High tariffs may favor HY over HG.
Deregulation would likely be welcome by most sectors and companies, but there
would be winners and losers within sectors. The future of the ACA in Healthcare,
 of environmental mandates in Utilities and Autos, the impacts of tariffs on different
parts of the retail sector, Tech and commodities, and a pro-domestic production
agenda in Energy are among the topics discussed by the sector analysts. The
potential for more M&A is a theme discussed by most sector analysts. All this
being said, we’d caution investors that, at least for credit, the Fed matters more
than the White House in our view over the medium term. As well, while we can
surmise the general potential impacts of certain policy proposals, the devil is very
much in the details as to how a particular piece of legislation could eventually
come together and impact specific companies.

• FX (Chandan) – Meera and team estimate that FX is pricing in 60-70% chance of a

Trump victory, leveraging our scenario analysis targets. The team notes that election
volatility is 10-30% higher than at the same point in 2020 and 2016. Option markets are
pricing a higher premium for a delayed outcome. Moreover, the team suggests that
positioning is not an impediment to USD upside despite large buying flow in October and
is just a slight tailwind for USD shorts in a Harris victory. AUD longs are a risk given China
linkages.
• In a Republican sweep, USD TWI can appreciate another ~5%. EUR/USD 1.00-
1.02, USD/CNY 7.40, USD/JPY 155-160.
• A Trump victory with Split Congress could see +1.5-2% USD upside. EUR/USD
1.05, USD/CNY 7.30.
• A Harris victory with Split Congress sees USD weaker. EUR/USD 1.13-1.15,
USD/CNY 6.95, AUD/USD 0.69.

FX UNDER VARIOUS US ELECTION OUTCOMES (JPM FX RESEARCH) – below was originally

published on October 11, 2024 (here), some scenarios may be updated.
Source: JPM Research

• COMMODITIES (here; 2024 US Election Watch—Cutting Through the Noise): The

Commodities team has assessed implications for commodities under various election
outcomes. Overall, Kaneva notes there is a “lack of a clear pre-election trade given the
range of scenarios that could play out.”
• The top priority for both administrations is to ensure the security of supply in
energy and minerals and to lower energy prices to curb inflation, which, in our
view, takes precedence over Trump’s intention to reimpose oil sanctions on Iran.
If Trump proceeds with curbing Iran’s oil exports, we believe that OPEC would not
compensate for the lost volumes and would only gradually increase its oil
production by the predetermined 180 kbd over 12 months.
• Instead, a second Trump administration would aim to increase domestic US
energy production by 3 mbd of oil equivalent over the next presidential term via
deregulation. This contrasts with our projection of 4 mbd growth, regardless of
who occupies the White House.
 • Conventional thinking suggests that the election outcome will impact the demand
side of oil, gas, and metals due to differing approaches of both presidential
candidates towards decarbonization. However, we believe reindustrialization,
now a bipartisan priority, could mitigate this effect. China sees electric and
autonomous vehicles as crucial to future techno-industrial competition, and the
US needs to accelerate the development of these technologies to remain
competitive.
• Debasement trades are likely to perform well under any administration, though
could get further supercharged under a Republican sweep. Gold stands out as
the commodity of choice for hedging the US elections. While an election
surprise could prompt a near-term correction, structurally bullish drivers for gold,
like growing concern on complacency over the rise in fiscal debt, tariffs, and trade
retaliations as well as supportive Fed rates cycle should benefit the metal.
• Tariffs on China remain a large bearish risk for base metals, although the
implications have become more convoluted given the potential for counteracting
factors including a strategy of “escalate to de-escalate”, growth supportive fiscal
initiatives under a Republican sweep, and China’s potential ramped up stimulus
delivery to counteract a tariff-led growth hit. This ultimately means volatility could
trump directionality for the sector under a Trump administration, meaning
investors need to stay nimble as timing and evolution of policy priorities will be
key.
• Of the myriad of possible implications of the 2025 US election on agricultural
markets, a return to tariffing and a hostile trade relationship between agricultural
juggernauts the US and China under any form of a Trump Presidency stands as
the most impactful. Lower energy-based input costs for US farmers are likely
under any new administration, while agricultural labor supply may be squeezed
under Republican immigration policies.
• Off a relatively low baseline of US-China agri trade in an historical context, both
candidates may offer upside potential for traded US agricultural export volumes
during the next Presidential term, in our view, with China potentially making
goodwill purchases of US ags in the event of trade negotiations under a Trump
presidency, while a removal of tariff risks under a Harris presidency should drive
confidence in prompt and deferred US ag purchases.

SELECTED SECTOR VIEWS:

• REGIONAL BANKS (here) – “With the US Presidential Election less than one month
away on Tuesday, November 5, the result of this election is likely to result in very different
 outcomes for the banking sector in terms of proposed regulations as well as the backdrop
for M&A activity. At its core, should the Democratic party prevail under current Vice
President Kamala Harris, this outcome is largely expected to continue much of the current
Biden administration regulations as well as proposals including the recent Basel III
Endgame re-proposal by Fed Vice Chair for Supervision Michael Barr. Moreover, a Harris
administration is likely to continue the ongoing backdrop for limited M&A activity which
has been running at the slowest pace since the Global Financial Crisis. Under a potential
Trump administration, however, a handful of tailwinds could occur including on
deregulation as well as a more favorable backdrop for M&A which could spur additional
activity after having largely been dormant for the past few years. With the latest betting
odds from various sources showing Harris and Trump are largely tied to win, we take a
closer look at the implications for the regional banking sector under either outcome in the
upcoming US Presidential Election.”
• HEALTHCARE (here) – “Healthcare/pharma may not be as topical in the upcoming
elections as it was in past elections, but there are a number of major topics on our focus
list. In addition to the topics discussed below, the upcoming lame duck session (especially
with the expected retirements) should garner attention as a number of important areas
must/could be addressed such as the extenders (including near-term relief on PFS,
hospital at home, telehealth), PBM bill and the CR. The presidential election and the new
administration’s impact on the CR could shift many new bills to March 2025 or thereafter.
The primary focus areas include the ACA subsidies, PBM bill, Medicare Advantage and
Drug Pricing. We also provide views on the FTC/DOJ and highlight other regulations that
may be introduced, marked up or voted on in 2025 and that could be affected by the
upcoming election. Our full HY and IG research teams recently published strategy/cross-
sector notes establishing possible outcomes under specific scenarios: Blue Wave (link
here) and Red Wave (link here). Under a Republican-led House and/or Senate, the
primary focus may be on the risk of extending the current ACA subsidies and whether the
Democrats need to dial back the generosity afforded under the current plan.”

• METALS & MINING (here) - M&M equities to face volatility in 2H amid election/rate
uncertainty. In particular, we anticipate 1) steel equities as most exposed to
protectionism/Trump trade, 2) base metal equities to China trade relations, and 3)
lithium/rare earths equities to EVs/Red Wave. Nonetheless, the trajectory of interest rates
can impact stock performance in the interim, namely for non-res/industrial levered sectors
such as steel/downstream aluminum.
 • Positive trade headlines/Trump trade can drive steel equities higher in particular
(100% domestic footprints ex USSE/STLC) as already demonstrated during 1Q24
on trade comments from Trump.

• MP beneficiary of protectionism longer term, although risk of near-term retaliation,

which could limit ability to sell REO into China before fully building out midstream
capabilities and/or securing enough ex-China offtake.

• On lithium/rare earths, any impacts to consumer EV tax credits likely drive

negative reaction given stocks generally overshadowed by EV sentiment;
however, we sense underlying fundamentals less at risk given the need for
Western/clean supply.

• We expect PLL in particular responds negatively on any indication of limited DOE

LPO capabilities given financing for its Carolina project has yet to be secured
(unlike LAC’s Thacker Pass).

• On base metals (AA, FCX, TECK), stricter China tariffs more likely to affect
underlying pricing/demand over time via FX/GDP impacts.

• AA can further benefit from IRA 45x should raw materials (i.e. pitch, coke,
alumina) be included, and we see little risk of existing provisions being removed;
shares likely respond positively once a decision has been made (as seen late last
year), albeit timing remains unclear at this point.

• CLEAN TECH EQUITIES (here) – “Clean Tech performance over the last six months (-
12% vs. S&P +13%) has begun to reflect investors’ concerns around a Red Wave
scenario coupled with sustained weakness in fundamentals. We see room for further
volatility through election day and formalization of the next president’s economic/policy
agenda driven by 1) election odds meaningfully favoring one candidate over another, 2)
trajectory of interest rates in the back half of the year, and 3) elevated short interest for
the majority of our names. A Harris/Split Congress scenario could provide some near-term
relief as investors regain confidence. Looking at three presidential election cycles, we
found that the S&P Clean Energy Index historically outperforms the S&P in the one month
following a Democratic win and vice versa after a Republican win by up to 5-6%.”

JPM RESEARCH
• 2024 US Election Watch: Harris 1.0 vs Trump 2.0 – Polls, Predictions and Policies, Joyce
Chang et al., September 25, 2024
 • 2024 US Election Watch: Shifting narrative once again: A Presidential race reset, Joyce
Chang et al., 24 July 2024
• 2024 US Election Watch: Shifting narrative and market implications, Joyce Chang et al.,
19 July 2024
• 2024 US Election Watch: Post-presidential debate still sees a toss-up but next three
weeks critical for Biden, Joyce Chang, Amy Ho, Zahin Mohammed and Mike Feroli, 3 July
2024
• 2024 US Election Watch: Biden vs. Trump Redux: Macro and foreign policy implications
and key risks to monitor, Joyce Chang, Amy Ho and Kamal Tamboli, 25 April 2024
• 2024 US Election Watch: Too early to make assumptions on the outcome of the
presidential elections, Joyce Chang and Amy Ho, 13 February 2024
• What to watch in the 2024 US election and political landscape, Joyce Chang and Amy Ho,
13 February 2024
• The 2024 election bonanza: Will politics reshape geopolitics?, Joyce Chang et al., 19
January 2024
• 2024 US election kickoff: 10 themes to watch while monitoring US elections, Joyce Chang
et al., 17 January 2024
• J.P. Morgan Perspectives: What to watch in the 2024 election super bowl, Joyce Chang et
al., 10 January 2024

CALENDAR

CALENDAR
• November 5: General Election

OUTCOME MATRIX / THEMES / SECTORS

Source: JPM Research; JPM International Market Intellige
Source: JPM Research; JPM International Market Intelligence

The below was from our 2020 Election Series. You may find this useful.
POTENTIAL OUTCOMES OF 2020 US ELECTION
PAIRING A PRESIDENT TO A CONGRESS
BIDEN
Loose fiscal and monetary policy, but no ZIRP. $2T+
DEMOCRAT MAJORITY

infrastructure bill focused on clean/green and likely

EXPECTED POLICIES & OUTCOMES more stimulus pending outcome of vaccines. Tax
hike, min. wage hike. Increased regulation of Big Tech
and Financials

FACTORS Cyclicals, Long Value

+ve: Clean Tech, Clean Energy, ESG, Healthcare,

Infrastructure, Min. Wager Winners
SECTORS -ve: Big Tech, Defense, Energy, Financials, Low
Margin/Min Wage Hike, Sin Stocks, Tariff
Beneficiaries
REPUBLICAN MAJORITY

Stagnation, no further stimulus. Potential for a small

EXPECTED POLICIES & OUTCOMES
infra bill focused on 5G

FACTORS Secular Growth, Short Value

+ve: Big Tech, Telecom

SECTORS
-ve: Clean Energy

Stagnation, no further stimulus. Jay Powell or

DIVIDED CONGRESS

EXPECTED POLICIES & OUTCOMES someone similar in the Fed chair. Infra bill but without
clean energy provisions

FACTORS Secular Growth, Short Value

+ve: Big Tech, Telecom

SECTORS
-ve: Education, Energy

Source: JPMorgan Research & Strategy; JPMorgan Market Intelligence

 TRUMP

DEMOCRAT MAJORITY 2nd impeachment is possible. Stagnation ahead of

EXPECTED POLICIES & OUTCOMES
that impeachment trial

FACTORS Defensives, Secular Growth

+ve: Big Tech, Telecom, Real Estate, Utilities

SECTORS
-ve: everything else

More tax cuts, more shareholder distributions, less

regulation. New Fed chair who embraces NIRP.
EXPECTED POLICIES & OUTCOMES
REPUBLICAN MAJORITY

Attempt to save Coal/Energy. 5G Infrastructure.

Bailout for airlines

FACTORS Secular Growth, Long Value

+ve: Aerospace, Airlines, Defense, Financials,

SECTORS Infrastructure
-ve: Clean Energy, Healthcare/Pharma

Similar to last 2 years. May get additional stimulus.

EXPECTED POLICIES & OUTCOMES Powell replaced but may not be able to get a NIRP-
supporter
DIVIDED CONGRESS

FACTORS Secular Growth, Short Value

+ve: Big Tech, Telecom

SECTORS
-ve: Energy

Source: JPMorgan Research & Strategy; JPMorgan Market Intelligence

POLICY ANALYSIS

Harris’s offcial campaign website is here. Trump’s official campaign website is here.
The following chart was provided by JPM Wealth Management’s Key Investment Themes
publication.
The below chart was used in our 2020 Election Series and may be useful for understanding policy
initiatives as well as seeing how views have evolved.
 POLICY SUMMARY

ISSUE BIDEN TRUMP

Raise corporate rate to 28%; create
Corporate Taxes Corporate tax rate lowered from 35% to 21%
minimum tax rate of 15% on book income

Restore top rate to 39.6%; raise capital

Lowered federal rates from 10% to 39.6%
gains tax to ordinary rate for
Personal Income Taxes brackets to 10%
those earning >$1mio; wealth tax (details
to 37%
unspecified)
Enlist US allies to challenge China on trade; America First policy involving withdrawal
advocates enforcing from TPP,
Trade existing trade laws while writing new rules renegotiation of NAFTA,
that protect workers, the trade/tech/investment war against
environment and labour standards China and early-stage trade war with EU
Improve Affordable Care Act (ObamaCare) Failed attempt to repeal Obamacare in
by adding public 2017. Currently, attempting to get SCOTUS
Healthcare insurance option; Medicare to negotiate to end Obamacare. Executive Order to
drug prices; link domestic to protect pre-existing conditions, currently
international prices part of the existing Obamacare law.

Ban new leases for drilling offshore and on

federal land; partially
Opened more federal land to drilling ;
supports Green New Deal end fossil fuel
Energy reduced
subsidies; supports carbon
Iran/Venezuela output through sanctions
tax; end fossil fuel subsidies; 100% clean
energy by 2050
Supports using anti-trust legislation to No significant sector specific policies,
Tech & Communications investigate anti-competitive though DoJ, FTC &
practices FCC investigations ongoing
No signature legislation, but more lenient
Finance Support a financial transactions tax interpretation of
Dodd-Frank
No signature legislation. Floated $1T as part
Infrastructure $2T plan including green proposals of new stimulus bill but dropped the
proposal.
End family separation; protect DACA;
create a pathway to citizenship; Border wall; record contraction in legal
Immigration give more resources to better immigration through
leadership/training within ICE; don't visa limits
decriminalize crossing borders
Favors lower rates and replacing Powell;
Monetary Policy No public comments Two open board
seats to fill
Federal Minimum wage unchanged at
Other Raise minimum wage to $15/hr
$7.25/hr

Source: JPMorgan Strategy (JPMM); JPMorgan Market Intelligence

GLOBAL DATA ASSETS & ALPHA GROUP

MARKET INTELLIGENCE

Andrew Tyler | Head of US Market Intelligence | +1-212-622-8067 | [email protected]

Federico Manicardi | Head of International Market Intelligence | +44-207-742-7008 | [email protected]
Ellen Wang | US Market Intelligence | +1-212-270-0533 | [email protected]

DATA INTELLIGENCE

Luca Rainero | Head of Data Intelligence | +44-207-134-8534 | [email protected]

Edwina Lowe | Data Intelligence | +44-203-774-3138 | [email protected]
Gunel Mammadova | Data Intelligence | +44-207-134-8534 | [email protected]

POSITIONING INTELLIGENCE

John Schlegel | Head of Positioning Intelligence | +1-212-622-6512 | [email protected]

Jigar Vakharia | Positioning Intelligence | +44-207-134-0275 | [email protected]
Sunny Potharaju | Positioning Intelligence | +1-212-622-3688 | [email protected]

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