More Americans think a Joe Biden victory would send stock prices higher than a Trump victory, according to a recent U.S. survey. The results come as something of a surprise, as President Donald Trump has received consistenly marks from the public for his stewardship of the economy.
A survey of 1,000 Americans conducted by Eaton Vance on October 19 finds that a majority, 58%, believe a victory by former Vice President Joe Biden will send the stock market higher. That exceeds the sizeable minority, 46%, who also think a victory by President Trump will also push stocks higher.
Trump has frequently touted the strong performance of the stock market as evidence of what he has called "the greatest economy in history." But while both the stock market and the economy have recovered from their low points in March and April, unemployment stands at 7.9%, above where it was when previous presidents including President Reagan and President sought re-election after severe recessions.
The results represent a significant change from the last time Eaton Vance posed the question to Americans. Two months ago, a Trump victory was seen as slightly more positive for the stock market by Americans surveyed by the mutual fund company.
On August 17, 52% of Americans said Trump victory would cause stocks to rise, while 51% said the same outcome would happen in the wake of a Biden victory.
Americans are increasingly convinced that Biden will win, according to a news release announcing the survey. Fully 61% said they expect Biden to be the next president, compared to 51% who said so back in August.
The survey also found that the health of the economy was now the most important issue for Americans, followed by the response to the Covid-19 pandemic. This represented a reversal from August, when the response to the pandemic was seen as the most important issue.
“It has become a popular cliché to observe that markets dislike uncertainty. By early November, investors will know who will control the White House for the next four years, and they will be able to make educated guesses and assumptions about the tax, spending and regulatory policies that will influence the direction of stock prices. Or will they?” asked Eddie Perkin, Eaton Vance chief investment officer of equity.
Perkin conceded the outcome of the election remains unclear. “With a potentially tight and possibly even contested election result, along with heavy mail-in voting that can take several weeks to tabulate based on each state’s vote-counting protocols, it is possible that the winner may not be determined until December — or later!” he continued. “The opportunity to undertake end-of-year tax planning, potentially including flipping from traditional tax loss harvesting to tax gain harvesting (in anticipation of higher tax rates in the future) may occur in an ultra-tight window leading up to December 31, as financial advisors and tax-motivated investors await clarity before acting. Scenario planning ahead of Election Day is one way for investors to ensure they are making decisions with their heads, rather than their hearts, in what is likely to be a tumultuous end to the year.”