Yahoo Finance Wall Street is cranking up its odds of a Trump presidency
Political research analysts at Citigroup say the possibility of a Donald J. Trump presidency “cannot be ruled out.”
In fact, they’re cranking up the probability of a Trump win though they’re still predicting a Hillary Clinton presidency as the most likely outcome of the 2016 election.
“Our base case scenario continues to be that Hillary Clinton is most likely to be the next US president. However, we have increased our probability of a Trump victory to 35%. While Trump’s standing in the polls has remained largely stable over the last six months, Clinton has lost momentum among voters,” the note says.
On Tuesday evening, Trump officially secured the Republican nomination at the RNC in Cleveland while lacking support within the Republican Party establishment. The DNC is next week and it’s likely to be “uneventful” with Hillary Clinton likely to secure the Democratic presidential nomination.
The Citi analysts are focusing on key swing states — Florida, Ohio, and Pennsylvania— where Trump appears to be gaining ground. They add that they would increase the 35% probability if there’s a “fairly significant post-Convention bounce for Trump, 2-4% points, sustained beyond the first few days.”
“Other developments that could change the trend in either direction include scandals (while ’emailgate’ appears to have wounded Hillary, it did not result in an indictment) or terrorist attacks, likely to benefit Trump,” the note says.
Elsewhere, analysts at Fundstrat Global Advisors say that Trump’s acceptance speech on Thursday night will be “an important moment” for his candidacy. If it goes well, he could get a boost allowing him to break the 40% ceiling where he’s been stuck in the national polls against Clinton.
“It is likely to be the largest audience he has had watching him as a candidate. Recently, in order to stay on message, he has used the hated teleprompter. While it has helped him sound more cogent, it diminishes his gut appeal – his informal, honest connection with the voters. One of his biggest challenges this week, and going forward, will be finding the right balance between the style that enabled him to clear a seventeen candidate Republican field, and the sobriety that is expected of the leader of the free world,” the Fundstrat note says.
At the point, Wall Street isn’t ruling out the possibility of a Trump victory.
Just last month, Nomura’s chief US economist and former Treasury Department official Lewis Alexander wrote a note for clients about the real possibility of a Trump presidency and what that could mean for the US and global economy.
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Julia La Roche is a finance reporter at Yahoo Finance.
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