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IPFS News Link • Politics: Republican Campaigns

Swooning stocks signal higher likelihood of Trump losing election-Moody's Analytics

• Reuters

That's a big change from what the model showed using data from February, when higher stock prices and Trump's steady approval rating pointed to the Republican president coasting to victory with 351 votes in the U.S. Electoral College to 187 votes for a Democratic challenger.

But financial markets have since plunged with the spread of the virus disrupting economic activity around the world and sparking fears of a global recession. A drop in the Standard & Poor's 500 stock index to 2,500 points - roughly Thursday's closing level - would signal enough economic anxiety to cost Trump the election, Bernard Yaros, an economist at Moody's Analytics, said on Friday.

"The S&P 500 would need to be 2,500 or less for Trump to lose," Yaros told Reuters in an email. He did not elaborate on the expected electoral college results in that circumstance.

U.S. companies are already reporting layoffs due to the health crisis but most economic data that will reflect that - and which experts use to make forecasts - won't be available for weeks.

That has Moody's Analytics, a leading forecasting firm, relying more on financial market movements which respond quickly to signs of economic trouble.

After plunging into bear market territory on Thursday, the S&P 500 recovered a small slice of its losses on Friday, finishing higher at 2,711 points after Trump declared a national emergency over the coronavirus. The U.S. Federal Reserve, seeking to prop up the economy amid the crisis, slashed interest rates to near zero on Sunday in an emergency move.


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