The US 2024 Election – What you need to Know – by Ramsey Crookall

In case you weren’t aware, an important election is approaching in the United States. The 2024 US election will take place on Tuesday, November 5th, 2024. The victorious candidate will assume office in the White House for a four-year term, commencing officially on January 20th, 2025.

As a bit of background, the US has two main political parties: the Republican Party and the Democratic Party.

• Republican Party: Their candidate is former president Donald Trump. The Republicans, also known as the GOP (Grand Old Party), support things like lower taxes, smaller government, gun rights, and stricter rules on immigration and abortion.
• Democratic Party: Their candidate is Vice-President Kamala Harris, who stepped in after President Joe Biden decided not to run again. They focus on civil rights, a broad social safety net, and measures to address climate change.

The winner of the election isn’t just the person who gets the most votes across the country. Instead, candidates compete in contests held across the 50 states. The election is decided by the Electoral College system, where candidates need to secure at least 270 out of 538 electoral votes to win.

Almost all states have a winner-takes-all rule, meaning the candidate who gets the most votes in a state wins all of that state’s electoral college votes. Most states tend to lean heavily towards one party or the other, so the real focus is usually on a dozen or so states where either party could win. These are known as battleground or swing states.

The 2024 US election is likely to be a costly and highly contested race. Similar to 2020, the race comes down to 93 electoral college votes spread across seven key swing states: Arizona (11), Georgia (16), Nevada (6), Pennsylvania (19), Michigan (15), Wisconsin (10), and North Carolina (16).

Roughly 244 million Americans will be eligible to vote in 2024. The 2020 election saw record turnout of 66.6% of eligible voters. If we see turnout that high again, more than 162 million ballots will be cast by November.

According to a Pew Research Center report, the economy remains the top issue among voters, with 81% saying it will be very important to their vote. Other significant issues include immigration, violent crime, health care, and Supreme Court appointments.

The New York Times Election Polls as at 22nd October 2024 show a close race between Harris and Trump, with Harris having a slight lead. However, social media sentiment analysis indicates a growing support for Trump, which could influence polling trends.

This election could have significant implications for investment markets, such as:

• Policy Changes: Different candidates propose varying policies on taxes, trade, and regulation, which can impact market sectors differently. For example, a Republican victory might lead to the extension of the 2017 tax cuts, potentially affecting corporate profits and stock valuations.
• Market Volatility: Elections often bring uncertainty, which can lead to increased market volatility. Investors might see fluctuations in stock prices as the market reacts to potential changes in policy.
• Sector-Specific Impacts: Certain sectors may benefit or suffer depending on the election outcome. For instance, energy, telecommunications, and utilities might see different impacts based on regulatory changes proposed by the winning candidate.
• Global Markets: The US election can also influence global markets, especially through changes in trade policies and international relations. This can affect everything from market volatility to international trade dynamics.
• Long-Term Trends: While elections can cause short-term market movements, long-term market performance is more closely tied to economic fundamentals like growth and inflation.

In summary, while elections can lead to short-term market fluctuations, the long-term performance of markets is more heavily influenced by economic fundamentals such as growth and inflation. Consequently, the results of the election and Congress could significantly impact market performance in the near term.

The dealing team at Ramsey Crookall have been helping clients navigate the ever changing political and economic landscape with their investment choices for over 78 years and they can be contacted by e-mail at dealers@ramseycrookall.com or by telephone at +44 1624 623884.