The US presidential election is the next big event on the agenda for global investors. Though the firmly mainstream Democrat Hillary Clinton is currently a clear favourite in the polls, the potential for political uncertainty is higher than usual with the populist and controversial Republican candidate Donald Trump in the running. And after the UK’s recent surprise vote to leave the European Union, investors will be taking predictions with more than the usual sprinkling of salt.

Increased market volatility would seem likely in the event of a surprise Trump victory. However, as with Brexit, we would expect the initial volatility to subside, especially as Trump may struggle to secure the necessary congressional backing for any of his policies that would fall outside of mainstream Republican conservatism.

Big economies are like economic super tankers, whose direction is not easily moved. And the US economy is the biggest. Factors like the growth of the labour force, education and technological change will continue to be the main long-term drivers of economic growth regardless of who’s in the White House. But that’s not to say there won’t be ups and downs along the way.


Of course, the choice of who leads the world’s largest economy has more potential to influence global markets than other general elections. But the question of who actually does the choosing may be less straight forward than you think – here’s how it works.

When US voters go to the polls on 8 November, they won’t be directly electing their next President, but rather voting for “electors”, making up the 538-strong Electoral College that will ultimately decide the winner. These are made up of the 435 Representatives and 100 Senators in Congress, plus three additional electors from the District of Columbia (the same number of electors as the least populous states).

Each of the 50 states is apportioned a number of electors based on its population – so, more populous states get more electors. Electors for each state are “pledged” to the candidate who wins the popular vote in that state, with the exception of Maine and Nebraska, where they are divided up by congressional district. Though electors are not obliged by law to vote for the candidate they are pledged to, there are very few instances in history when they haven’t.

Though there have often been independent candidates, all Presidents since the first – George Washington in 1789 – have been from one of two major political parties. There is currently no realistic chance of an independent candidate emerging to win the 2016 presidential election.

This system opens up the possibility that a candidate could win the election with less than 50% of the popular vote, by winning the “big” states with lots of electors, such as California (55), Texas (34), New York (31), Florida (27), Pennsylvania (21), Illinois (21) and Ohio (20). However, this has only happened four times in history, most recently in 2000 when George W. Bush was elected to his first of two terms as President. A majority of 270 electors is needed to win.



Most states can be divided into those that lean toward the Republican or Democratic candidate (“Red” and “Blue” states, respectively), but there are a few large states that are less predictable. These so-called “swing states” have the potential to swing the whole election in favour of one of the candidates.

So far, the traditional swing states of Florida, Ohio and Pennsylvania are all leaning in favour of Clinton, especially Pennsylvania, which makes a come-from-behind victory for Trump more unlikely.


26 September Presidential debate

4 October: Vice Presidential debate

9 October: Presidential debate

19 October: Presidential debate

8 November: Election Day

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