Candidates for the presidency of the United States had a turbulent debate on Tuesday night (29), which made analysts classify the event as “shameful”. Even with few positive moments to highlight, financial agents saw the advantage of former vice president and Democratic candidate Joe Biden over current president Donald Trump. However, the aggressive rhetoric between the parties increased among the financial agents the fear of a result contested in court, one of the most feared outcomes by the market.
With polls indicating a still-undefined result for the United States’ electoral race, expectations for the country’s first presidential debate were high. What was seen, however, was a night with high aggressiveness and little content that could serve to elucidate voters’ doubts.
“It is difficult to sum up last night’s debate in anything except the feeling of shame for what US policy has become. It was not my proudest moment as an American,” said NatWest Markets Chief Strategy Officer for America, John Briggs.
According to market bets, covered by electionbettingsodds.com, the likelihood of Biden’s victory increased to 58.4%, from 55.3% just before the debate and 51.0% four weeks ago. The likelihood of a Trump victory, in turn, dropped to 40.0%, from 42.5% before the debate and 46.2% four weeks ago.
The figures were cited by Berenberg Bank chief economist Holger Schmieding as an indication of the Democratic candidate’s better performance. “Biden seems to have started in the lead in last night’s rather chaotic debate against Trump,” he said.
For Briggs of NatWest Markets, given Biden’s leadership in the polls, Trump not only needs to gain ground, but he also needs the Democratic candidate to make mistakes. “This debate, in my view, will not be seen as what Biden, in general, made a big enough mistake to lose the lead,” he said.
“The overnight market reaction undoubtedly points to the same conclusion, with stocks operating in decline, on the consensus premise that a Biden win is bad for risky assets,” said the NatWest Markets analyst.
In addition to highlighting the poor content of the debate, Julius Baer economist David A. Meier highlighted Biden’s ability to resist Trump’s offensives. “President Trump has stood firm on a number of topics, such as the economy and health, but Biden has shown remarkable resistance, not being shaken by Trump’s verbal attacks and avoiding any of his famous blackouts, which his supporters feared,” he said.
“In fact, Biden got it right with a smart camera move, questioning viewers if they could really believe Trump. So the CBS quick survey saw Biden as the winner in points for 38% of respondents, Trump got 31%, and the rest of the voters remained undecided, “he said.
For analysts, the current president of the United States committed more serious slips in two moments of the debate: in not condemning white supremacists and in not committing to a peaceful transfer of power.
“Two key moments stood out to me and made me think that Biden ” won ”, although being declared the ” winner ” of this mess may have little value: Trump’s failure to condemn white supremacy and his failure to commit to a peaceful transfer of power, “said Briggs of NatWest Markets.
In a similar analysis, senior market analyst at brokerage Oanda says that “Trump has avoided fully condemning white supremacy and this will resonate with many African American voters. Biden needed to energize that base and Trump may have helped him with this mission” , wrote in a market update.
Despite the Democratic candidate’s slight advantage, Rabobank senior exchange strategist Jane Foley does not believe yesterday’s debate will make a significant difference in voters’ voting intentions. However, the aggressive rhetoric served to raise concerns that the result of the November election could be contested.
“Given the likely delays in counting postal votes and Trump’s predictions about electoral fraud linked to the process, there seems to be a tangible risk that both candidates will declare themselves winners of the election,” he says.
For Jane Foley, the prospect of a contested election in the United States comes at a time when the market is getting used to the fact that some of the restrictions linked to the covid-19 pandemic will remain in place for longer than expected in the beginning of the crisis.
“These restrictions threaten to hinder the global economic recovery, which should compel some investors to question their positions in risky assets. The simultaneous ongoing tensions between the U.S. and China can also threaten recent investor optimism and result in a move towards to defensive currencies, like the US dollar, “he says.