Credit Suisse: Democratic Sweep (40 percent); Republican Sweep (35 percent)
According to Credit Suisse economists, the Trump-Biden contest is closer than polls suggest and the bank overall places just a 60 percent chance for a Biden victory irrespective of the outcome on both houses in Congress. It sees a 20 percent chance for a Biden win paired with a Republican victory in the Senate and 5 percent for the opposite scenario.
The most certain outcome it is currently forecasting is a one-party government – at 75 percent – by either party which will result in substantial policy output.
Biden Hits Tech
The bank expects a Biden win to hit the overall equity market due to significantly increased taxes targeting large multinationals benefiting from the currently low rates.
The technology sector in particular is expected to be hit the hardest over taxes as well as growing Democrat consensus for anti-trust reform to rein in on big tech. The bank also expects sustainable energy to benefit as it was an important element of Biden’s platform.
In a Republican sweep, Credit Suisse expects tailwinds for smaller and domestically oriented firms. The materials sector, most notably construction materials, will benefit from increased infrastructure spending.
