Piper says Trump remains a ‘slight favorite’ in 2024 US election

Donald Trump is still a “slight favorite” for the upcoming 2024 US presidential election, Piper Sandler analysts said on Thursday. The former president is leading in the polls, though his margin is narrow nationally and in the crucial Midwestern states such as Michigan, Pennsylvania, and Wisconsin.

“The odds of a comfortable Biden victory (and a Democratic Senate, which was always a reach) have declined,” Piper Sandler wrote. “The House probably goes to the party that wins the White House.”

According to analysts, the 2024 election is seen as considerably impactful for financial markets as both candidates “pose a panoply of risks to financial markets, both tangible and intangible.”

Unlike recent elections, the biggest concerns for investors are macroeconomic in nature. Those include a potential reversal of decades of trade liberalization, elevated geopolitical risk and instability, an unsustainable fiscal policy, and substantial potential swings with respect to taxes, regulation, and immigration.

“Investors are focused on potential tariffs and the fate of the green subsidies of the IRA. Financials, health care, energy, defense, industrials and other sectors have a lot riding on the outcome, too,” Piper Sandler’s team added.

For intangible risks, analysts highlighted that one candidate is “temperamentally unfit to serve” while the other is “physically unfit.”

“Both are a threat to the rule of law, radicalizing own party and the opposition, have legal and ethical problems, viewed as illegitimate by half the country, and have no desire to persuade the country and are too unpopular to be heard,” the investment bank said.

The firm’s election odds currently stand at 60% for the Republican Party winning the White House, 55% for it taking the House, and 85% for it securing the Senate.

In terms of specific issues, the report highlights several areas where Trump is perceived to have an edge over Biden. These include the economy, immigration, inflation, and America’s standing in the world.

According to a CNN poll conducted in late April 2024, Trump leads Biden by 14 points on handling the economy and by 17 points on immigration. Also, the former US president is viewed more favorably in areas such as inflation, the Israel-Hamas war, and crime and safety.

On the other hand, Biden leads Trump on issues such as access to abortion and healthcare.