US ELECTION UPDATE: Trump Outperforms But Key Swing States Still To Come

Okay, very good morning to you if you're just joining us. It's just gone through 6:30 AM here in the UK. Myself and the team have been up all night just monitoring and delivering via Amplify Live to our community all of the price action from overnight. Had some really good moves and just wanted to give you really a summary of what the current state of play is. So overall, as you can see on the charts here, equity index futures, US-based, are higher. NASDAQ is an outperformer. It's up about 270 points, and that's even being off its initial high. I did briefly see a, a 2-minute trading halt when gains were in excess of 3.5%. The circuit breaker in that doesn't kick into a bit higher up, but it's just fatigued a little but still up fairly sharply. Otherwise, the dollar is still firmer, albeit off its initial highs, and that has kept then Both major pairs in negative territory, down 53 and 39 pips respectively in EURUSD and cable. Gold lower with some of that dollar strength. And then fixed income markets yields lower, so both Bund and the US 10-year higher, with oil following suit with the equity move. The main takeaway point here has been a pretty early move. The initial momentum that we saw in a lot of this asset class movement came pretty early on. And so just kind of reverse engineering it, this is the current state of play of around 6:30, uh, London time. And at the moment, Joe Biden is just a touch ahead by 211, but I wouldn't really focus on these total figures. That would be inappropriate because what really matters is what are the individual areas here. They're going to be the ones that are particularly key. Now the white states are the swing states or the battlegrounds. These are the really hotly contested ones and the ones that really are the deal breaker of who will win this presidential election. Now, importantly, one of the first ones that came out was Florida. Now, there was a little bit of apprehension in the air early on about who would win Florida and that if Biden could capture Florida as one of the first big critical swing states to report, then really it would be a big ask for Trump to win it from that point onwards. And Florida is one of the very early ones to come out just after midnight. And in fact, this is what Florida looked like in particular. And I was going to show you a breakdown, which was— yeah, here. This is the state of Florida, but this is looking at Florida on a county level. And so every individual county starts reporting results and its different districts and so on. And the particular important one that came out that really moved the market was Miami-Dade County. Uh, that's the most populous one, includes the city of Miami, for example. Uh, it did vote quite heavily for Democrats, but in terms of comparative to 2016 when, uh, Clinton won that same specific area, the lead for the Democrats had decreased by around 10%. So when you then start looking at the rest of the state, which is predominantly Republican, and the lack of as much following in that area, that was quite a key signal for markets. We saw quite a big move on the back of that initially. So stocks going bid, the idea that, well, hang about, this isn't going to be a blue wave. In fact, Trump is looking quite positive at this point. The other key ones then that started to come through were ones like Ohio. We've seen just in the last couple of hours confirmed has gone the way of the Republican Party. Just having a look at Ohio, I think I still have it up here from when it came out as a result, 53.3 to 45.2 in favor of Trump. I think it goes back to the mid-1960s or so that every presidential win has come by way of securing every single time Ohio. So Ohio equals then normally the outcome, the person goes on to become the president. So it's a bit of a bellwether in that sense. It's also quite large in terms of its Electoral College representation. Then the other big one people were waiting for was Texas. It was looking very tight early on. We have only had— well, we've had now 94% of the vote in, so it's pretty much done that it's that it's Trump. He's been declared the winner. Still a few more remaining votes to come in, but it's not going to be enough to really move and close the gap on what it was. A fairly comfortable victory to pick up 38 electoral votes for Donald Trump. So again, another key area that some were expecting Biden to potentially challenge. So overall on the map here, the main takeaway is the polls were generally wrong. They've overestimated the performance performance of Joe Biden. Trump has done better than expected, and he's held on to some of the key so far swing states. Now the important part here comes with, well, what comes next? At the moment, markets are in a little bit of a hiatus waiting for the next move, and that's because really when you start working out the mathematics, the really key areas, the ones that really count, are all pretty much remaining swing states. Now, of particular focus, as we've discussed before, is Pennsylvania, Pennsylvania, Michigan, and Wisconsin. And what we've heard from various different talking heads overnight is that between those three, there could be delays between getting final, more definitive results when the US starts to come in in a few hours' time. So London time this afternoon, and then in the evening, and some even the following evening tomorrow. And so if it goes by way of means where this race to the magic number of 270 is literally neck and neck and it comes down to then the final few states, it's going to be really important. And markets might well get a little bit nervous, and generally that plays out quite negatively in terms of the uncertainty that that would bring. Also as well, don't forget then that generally the closer run it is, if it is very fine margins, then this is what markets kind of wanting to avoid, which was markets have reacted better, more positively, in the sense of when there's been more potential for a direct, more clinical outcome. The closer it is, the more complicated it becomes because it might then entail recounts, legal challenges. If it goes through the court system up to the Supreme Court, that's going to take time. And all that time, obviously, there's COVID-19 happening in America. There's no stimulus happening. So it could well be a short-term negative until that gets resolved. So far as well, Joe Biden has just given a speech. He's been fairly, I'd say, combative in his tone, saying about, we can still do this, we can still win, we can pick up these Pennsylvania, these key areas. And then Trump, literally as he started speaking, started tweeting. It's a little bit pantomime, but I definitely think that as it might well be appearing at this point in time, if it's going to be contested, this could play out for a number of days yet. So that in itself could well start to seep into some negative price movement of what otherwise has been fairly positive price movement overnight, because markets don't like uncertainty. So that's generally what I'll be looking out for, for, for the session ahead. That's the latest status quo. Again, on the FT, a useful thing we've been using overnight— if you just go to their US election 2020 section, and these are the remaining swing states. And basically, with the current count as it's projected at the moment, you can see here you can basically tag off these and you can start doing the kind of mathematical probabilities to see what strategic routes each candidate could have in order to secure that magic 270 to win the race. In terms of the other key thing, which is the composition of Congress, at the moment hasn't really been too much in the way of real surprises there. Things going pretty much as expected. So at the moment it's quite neck and neck, but at this point in time it is looking, I would say, perhaps slightly more favorable that Trump will win the presidential race at this point Wisconsin, Michigan, some of these other areas, although we're not near full results as yet and that will take some time as I mentioned, they are leaning towards Trump at this point in time. But the House is looking like it might well stay Democratic and the Senate Republican. If that is the case, then that's that status quo situation which was in fitting with my expectations before the event had unfolded. So yeah, hopefully that's an update. That's where we're at with things at the moment, specifically on the election. So yeah, good luck for the rest of the day. Thanks very much, guys.