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Your predictions for the US presidential election and the ASX300

Our September survey asked who would win the next US Presidential election, and where the ASX300 would be over the next six months, one year, and five years.

Who do you think will win the U.S. Presidential election in November 2020?

A nailbiting result if Firstlinks readers know their stuff. We have Biden winning by a very narrow 0.2% margin.

What level do you expect the ASX300 index will be in 6 months, 1 year and 5 years?

The short-term outlook for the ASX300 is evenly distributed, hovering around flat or modestly up or down. Looking at a 1-year horizon, most have predicted the market will be modestly up (40%) or flat (30%). Then, for the 5-year horizon, we see optimism creeping in a bit more, with the majority saying the market will be modestly up (56%) or strongly up (31%).

Comparison with our April 2020 survey

In our previous COVID survey, we asked: Has the low point since January already passed?

The S&P/ASX300 closed at a peak of 7,115 on 20 February 2020 (seems so long ago) before falling to 4,500 by 23 March, but clawed back to 5,443 by 14 April, making it down 23% since the high. Despite the recovery, only 17% thought the market had bottomed, a similar number to those who didn't know. Two-thirds of responses thought a new low was coming, including 24% who said we are in a longer-term bear market. At time of writing this, ASX300 is back to 5,900.

Here are the results again from April 2020, indicating that so far, the market recovery has been much better than expected.

Comments on Trump vs Biden

I think most thinking Americans are concerned by Trump's unreliability and distortion of the facts. 

Hopefully Joe Biden....Trump is a disaster both for the US and the globe.

Trump is better at marketing, better at public speaking. If you tell the same lie often enough people will believe it is the truth.

Difficult choice, old age seems to affect one candidate.

I hope Joe Biden will, but I'm not sure. Trump is a despicable character but he has fulfilled a lot of his promises.

God help us if Joe Biden wins, this is a man who has looked after himself and the establishment. Donald Trump is the first president who has not taken the US into a new war. He also recognises the danger that China poses to the democratic world.

President Trump is drawing more supporters than Vice President Biden. The polls are deceiving. Biden may win only if the Democrats cheat in the voting system.

I hate to choose Trump but I think he is the stronger in such a competition - prepared to lie, cheat etc but I think it will be terrible for world trade and will accelerate the current Australian "fight" with China.

How long have you got. 1. If you want a full run down on just how corrupt the leading Democrats are, read Peter Schweizer's book, Profiles in Corruption. 2. Trump has delivered on nearly all of his electoral promises till the Chinese let loose Covid on the world. 3. All of the rioting is occurring in cities that have been run for decades by democrats, most of which are bankrupt. 4. he has drained the Washington swamp to a great degree and don't they just hate it! 5.He has swung the Supreme court to conservative from left wing, and these facts are just for starters. The silent majority in middle America can see just how corrupt and hateful the democrats have become. I could go on but I have to get to the golf course.

I hope Biden will win as he may return some sanity to international institutions.

Prefer anyone else to Donald Trump, he is not president material.

Donald Trump is too irrational and too egotistical, which will affect voters.

He has survived this far without losing his base, no reason to see change.

Doubt the media know what the real America thinks.  No one represents the large blue collar population who will turn out to vote for the lesser of two poor candidates.  There must be better people available.

But I was wrong last time when Trump was elected so I wouldn't put any money on Biden this time.

Not that I support him, but I find it very hard to believe that these 2 candidates are the best that USA can come up with.

America surely can't make the same mistake again!

Trump is destructive and cannot be trusted. He has no plan, no idea of leadership, and has no interest in anyone other than himself. Biden is a fairly average politician.

The incumbent has a huge advantage. Biden is a poor candidate.

Hard to know, from so far away, but Trump's supporters are fanatical and in a voluntary voting system may be more likely to turn out on the day. If Trump wins, we can expect another 4 years of incomprehensible madness, unpredictablity, tweet rants and interference in trade markets, but those who would prefer Biden should be careful what they wish for.

Will do anything to retain power. Given this fears held for the ramifications for Australia and its relationships.

How any sane person could vote for him is beyond my understanding but these are Americans with non-compulsory voting and a "democratic" system that is heavily biased against poorer people. eg elections on a weekday and bosses who wont let workers go and vote, and a difficult registration system.  The consequences are enormous with the US retreating even further into its shell and world trade being completely disrupted. Lots of consequences for Australia too in a security sense especially as you couldn't rust Trump as far as you could spit.

Trump will manage to shoot himself in the foot, especially over covid and his disrespect for US servicemen and women. Joe Biden is a decent man.

Trump is a danger to the world. He should be unelectable.

Unfortunately as if he is the winner the world suffers for another 4 years from his complete lack of political sense and stability. The only winner will be his ego.

Too close to call.  Wealth inequality & extremist Democrat policies eg defunding police & allowing free for all for rioting & looting is destroying the US. Politicising of health policy has been extremely damaging.

The US, and the world, won’t benefit from another 4 yrs of Trump, and you have to hope Joe`s mental faculties would hold up.

He is a President who has minimal impact on life in US and can generally be ignored.

This is a hope - and may or may not line up w the outcome, but... Polls showing Biden is ahead. Trump not raising as much money either vs Biden - or vs his own coffers in 2016.

The thought of four more years of Donald Trump's incompetence, nepotism and narcissism makes me sick, so I sincerely hope my prediction is correct.

Trump can win only if the election process is not sabotaged. A Biden win would be a recipe for economic and social destruction in the US.

Much as I dislike this outcome, I think Biden will trip himself in the intervening period and Trump’s ability to spin himself out of all his failures will result in a narrow win for Trump. However, I do not believe Trump will make America great again and will continue the decline of the USA already evident.

I am hoping that voters will realise the consequences of Trump being re-elected. I am assuming there is still some sense of doing the right thing amongst US voters and they will reverse the mistake they made 4 years ago.

Trump has a proven track record in management and his knowledge of business and management would make him a better President. Biden is too mentally deteriorated to function efficiently and his party too leftist to govern efficiently.

Trump is likely to campaign better, resulting in enhanced Republican voter turnout.

The Trump administration has been a complete disaster for the world in terms of economic and environmental health. It is rapidly moving towards a hot war with China. A Biden administration can't be any worse.

Joe Biden and his team are not a strong opposition and Trump will still hit the spot with those voters who think he is doing a good job.

With all his faults Trump should be re-elected. I feel sure that a majority of Americans will not give their country to Biden and his cohorts.

Trump's 'floored' character and lack of diplomacy will work in favour of the US economy and he's not concerned if he upsets the CCP!!!

Dems have gone too far left- there will be positives & negatives resulting from a Trump win.

It's a poor choice between a megalomaniac and a geriatric. America is in a bad way when these are the best they could find. Mind you, you wouldn't want Clinton either.

American sentiment has swung alarmingly right wing and Joe Biden is not a strong candidate. The consequences are more of the same chaos.

Middle Americans seem to love Trump even if the media don’t.

Notwithstanding the possibility of election interference from Russia, China, etc. Biden appears to be fairly consistently leading in polls and the all-important Electoral College numbers. Consequences may a reduction of domestic radicalisation, international tensions and environmental damage.

I happen to think anyone other than a potential American voter expending any physical or emotional energy on this issue is fooling themselves and wasting precious personal resources.

I can’t believe America could be so socially destructive as to elect Trump

hoping for Biden, but Trump could win if the Biden supporters are lethargic.  I feel that all politicians are in it for themselves, not for the greater good.

Do I have to choose?  They're both so...unelectable.  Biden will do nothing, Trump will do too much, generally impulsively and misguidedly.

Either way the power decline of the US will continue.  The new world order is emerging in front of us now

Very poor candidates to select from, however, the world cannot afford a Democratic led USA. Whilst the western world has been weakened with covid19, China is flexing its muscles on the international stage. We do not want the world's main super power to be China

Biden & Harris would not win against credible opposition; they will probably win as the only alternative to Trump.

Its a close race and either result would not surprise me. I guess I am hoping that the worlds biggest superpower has sufficient grass roots intelligence to install anyone but Trump. But that statement truly worries me.

Trump has been rejected by a material number of his party and the very conservative counties that got him into power have swung materially against him.

Unfortunately I think The Donald will win.  Such a pity the Democrats could not have found a more promising candidate.

I would hope that for the best of humanity Joe Biden although knowing the caliber of political awareness of the average USA citizen it would not surprise me that Trump be re-elected.

I think enough Americans will have worked out Trump by now

It is a shame there is no real candidate, Someone young with vitality that could really make a difference. Trump will be hamstrung by a hostile senate

Covid will get worse, no vaccine ready til mid next year, bad press re veterans, campaign funding is lower for Trump, so Biden should win

Trump won’t capture the key states like he did four years ago.

The polls are wrong, people hide their opinion about Trump, I expect there will be another 4 years of trying to get rid of Trump by Democrats, there will be more social division, more violence, and emphasis will become on law and order, and I expect republicans to win after Trump ends his 2 terms.

Neither are worthy but it is more likely Biden will bring & retain quality talent in critical government leadership positions.

Joe Biden simply doesn't know how to stoop to Donald Trump's level.  Trump will campaign on anger and fear which will resonate with many disparate groups looking for a champion (just as in 2016).

Never underestimate the power of stupid people in large numbers. Trump is by no means out of this. The Democrats are not the savviest political organisation on the planet.

Biden is playing too safe and leaving Trump to take the running politically. Assuming Trump wins we will see more of the same. It is important for Australia and the west for America to remain a strong and robust power. We will see a greater emphasis on the "alignment of interests" which could be painful for Australia with respect to trade and investment with China.

Unfortunately, as the last thing we need is a continuation of the trade war.

Trump is a divisive President but he has stuck to his campaign promises and the financial system has flourished. Biden is ineffectual.

I am stunned it is so close.

Biden has dementia, is corrupt and possibly a sex offender. The US is incapable of solving its problems.

Common decency prevails, although there will be a knee-jerk sell-off as his victory appears more likely

hopefully but not guaranteed. the old saying "u can't fool all the people all the time", but with a two party political system and weird priorities and lies, u only need 30% of all Americans to vote for a trump upset

Trump hasn't handled COVID well. Biden will be disastrous. He'll be dominated by left-leaning, so called "progressive" influences. Expect higher taxes, lower profits and ongoing unemployment.

The gorilla who loudly beats his chest and blames foreigners for all evils, is invariably more popular than the rational candidate who says we ourselves may be partly to blame.

Biden will lose the election rather than Trump win it. Trump is a far better campaigner and will probably win an election he should have lost.

Biden needs to explain his support for open borders, why he is soft on police, and his socialist policies around health, education, and climate change. China would be licking their lips at a Biden presidency. It will be goodbye superpower status if he gets in the White House, and a blow to the free world. And how genuine is Biden when he said on announcing his VP running mate, "This morning, little girls woke up across this nation — especially Black and Brown girls who so often may feel overlooked and undervalued in our society" That is playing identity politics, and many will see right through his race focused wokeness. It's hard to believe that a country of 330 million people, can produce such weak presidential candidates, and I suspect the American people may just see Trump as the least weakest.

I hope this is the case but I am not confident. Trump if re-elected will further exacerbate the deep divisions in the USA

Surely people have seen who Trump is. By the way he has done some good like standing up to the Chinese IP theft. No material consequences.

He will do anything he has to, regardless of consequences, to win and has a very strong backing that don't see reality.

The media has the election "polarised" by way of presentation of their coverage. Anticipate drama and social "eruption" ... because it's politics ... and there seems to be "more and more money" to throw at it!

Can’t believe the greatest country in the world has to choose between these two

I think it will be more of a negative vote, that is people wont want a rampant socialist and will take the erratic man currently in the job. If Biden was to win the US economy would tank because the business community would see that they would be constantly under attack from the socialist policies pushed by Biden and his supporters.

Surely the US has to go back to some decency.

Should reason rain across the voting demographic of USA, Donald Trump's attitudes and arrogance, as well as his handling of the COVID 19 pandemic will finally expose his improperness to be President.

Based on data from The Economist models, Biden seems a likely outcome.  But we've been surprised before.

Comments on the ASX300

The market is overvalued now and will take time to justify its level

It's probably at least 12 months before a vaccine/solution is found for COVI-19, so markets will remain relatively flat or down over the next 6 - 12 months. Assuming some sort of solution is found markets will eventually bounce back strongly

With the exception of a group of high flying stocks many of the larger Australian companies share prices are still well down in 2020. If the state governments can start to behave like adults, the Australian economy should pick up and drive support for many of the businesses that have been impacted by the Covid border closures. Banking, travel, tourism, education returning to some semblance of normality will have a massive positive impact on the Australian economy.

The Pandemic was only the catalyst for a monetary reset. It was coming eventually anyway. The whole market is overpriced and is only rising on momentum. It will crash the same way.

Everything being equal - if Covid19 becomes history or a vaccine is found before then.

It will depend on the ability to control Covid19, both via a vaccine and with appropriate treatment for infected people. Also world trade will need time to settle into a confident pattern which will take a while

With interest rates effectively at zero and returns from other investments sources very low the stockmarket is the only game in town until interest rates increase.

I'm an optimist, but not too much. Who knows what's down the track for us all, I only hope we get over it!

Long term cycles indicate a major crash is due in near future

I don't think that the reality of the economic downturn has yet been fully reflected in the share market.

As interest rates are so low people are looking for returns through dividends

Stock markets, especially in the US, have recovered too far too fast. Covid will be with us for a long time, and we are going to have to learn to live with it, which means low or no economic growth, lower profits and dividends, and more risk and volatility. Add the massive budget deficits and Government debt worldwide, which inevitably means higher taxes, and the outlook for the next decade is bleak, but it will take a while for investors to understand how bad the long term looks while they are almost entirely focussed on yesterday's Covid case numbers.

Can't see where an company can get their profits from

I see great volatility ahead & poor long term returns.

The weaning process will see a downturn in 6 mths but the other too are just wishful thinking!

The old economy & Lifestyle is being dismantled then the rebuild will commence. COVID is accelerating thus.

Stock market hasn't caught up w economic reality right now...interest rates so low that for now where else do "elders" put their funds...dividend hunting. No one knows where shares will be in 5 yrs, much less 1 year. That part: Silly question if I may say so...(Sorry)

I expect a decline over the next 12 months, then a slow improvement

The China trade is under real threat. There is no evidence Australia is capable of the reform necessary to expand local manufacture or develop globally competitive industries. Power generation, distribution and reliability, and gas production will remain mired in green/left refusal to face the reality of global price competition.

On the basis of a vaccine coming sometime next year things should improve. However there may be a significant dip next year as job keeper finishes and unemployment rises.

When the American stock hyper-bubble finally bursts, it'll take down the rest of the world with it.

Hopefully, after 6 months more stocks will be back to work and making profits, not just the FAANGs.

Pandemic will have significant, ongoing negative impacts on the world and Australian economies but there is likely to be even more substantial and long term stimulus. Interest rates are likely to remain low for some years yet.

Still too much bad news to emerge in the next year for a meaningful rise. Limited viable alternative will support prices. Longer term, doubtful that Australia has enough innovative, disruptive companies to provide meaningful growth. Also concerned that decoupling from China will also limit growth

I don't think the impact of COVID-19 has been fully factored in by the market. However, history tells us that economies boom after pandemics.

The market appears fully priced and the economic recovery will likely be sluggish due to structural changes forced by Covid, eg Modest growth in employment, slow population growth, business closures, etc

We haven't seen the worse of the Corona virus impact on businesses. Once the government support is unwound I see many businesses going to the wall and this will have a further negative impact on the economy.

Covid 19 will drive market down in the short term. The real cost of the pandemic will be felt over the next 6-12 months.

Stock markets are overvalued due to a number of reasons including massive government stimulus and record low interest rates. An effective vaccine should be in production in 1 year with a subsequent lift in economic outlook.

In 5-years time, likely the merry dance of rampant capitalism will have recommenced, possibly even fuelled by the changes wrought or accelerated by COVID. Meantime, no-one knows anything about what the future might be.

All predicated on vaccines being available that are proven through rigorous science to be safe and effective

The ASX300 contains a lot of lemons but gives exposure to technology, pharmaceutical, etc so will be driven up in the short term but will lose its way in the longer term. Competent, specialist investors and fund managers in the small company sector should have a field day over the next five years.

A lot of valuations are excessive and based on optimistic expectations re vaccine.  Some are completely divorced from reality. In the long run things will recover but it may take a decade or perhaps 12 years.

It could take years to recover from this. There will be no snap-back.

The real economy and the stockmarket cannot continue this crazy divergence. Low interest rates are one thing but once stimulus packages are would back around the globe its going to get really tough.

Recovery has to involve some pain as interest rates and liquidity are moved to long run 'normal'. The only thing holding up share market is government support, virtually zero interest rates so what else do you do with your money?

This is a hard one. It all depends on how long COVID stays with us. Will we have a vaccine next year? Will border controls be lifted (something that would help the tourism industry)?

It will take a while for the effects of Covid to be overcome but by then the generally bullish uptrend should continue

We have not seen the real effects of the recession yet, it will be ugly.

I think the market is roughly at fair value based on current interest rates and various sectors of the economy should rebound over the coming years.

I expect a large increase following COVID - whenever that may be...

While all countries are printing money the market will stay buoyant although slightly off the pace but long term depends on how countries claw back the deficits as to how the economies will react. Optimistically this will still have some positives.

Recovery from the pandemic may take a decade and up to half the current ASX 300 companies will fail well within 5 years, largely from the impact of the pandemic. But where else can you invest locally?

It will take 2-3 years to recover from covid-19 and longer for Australia to effect strategies to new markets away from China

In the absence of government stimulus of demand there is little if any incentive for business to invest. Only the best run businesses will rise above the resulting economic stagnation.

The end of the pandemic will see the recession hit. In 5 years the economy will have recovered.

Return to long term 7% growth after pandemic is controlled

Anyones guess and very different per sector

Not much happening on the ASX - we don't have enough Tech or Health stocks to really make it soar. 5 year view on worsening relationships with China.

All predictions may be worthless if autocrats leading China and the US decide to turn trade wars into shooting wars. Anti-others rhetoric is very bad news for us in Australia.

Stock markets should pull back on the weak company reporting season but they are buttressed by the fact there is nowhere else to put your money to get a reasonable return.

The country will eventually realise that Covid-19 is here to say, appropriate long term risk mitigation behaviours will be implemented, and the economy will move on into catch up mode.

I think that the damage wrought by COVID is not yet fully reflected in the ASX300.

Could be a monumental disaster but here is hoping it will survive.

Until our employment rate is back up and people are spending again, the companies represented on the ASX will be priced accordingly.

We need to wait to flush through the current debt situation. Government need to maintain surport for lower paid workers via welfare, business, job creation. Start paying volunteers i.e, firefighters etc.

Too much guesswork, too many unknowns.

Once the US election is over, some uncertainty will be removed which should be positive for the market. There is simply not enough alternative investments providing adequate returns at acceptable risk.

Gold and Mining will carry us out for a while and Consumer staples will continue to perform. Health and IT will continue to perform although there will some major changes to Aged Care delivery.

The world is going to take some time to drag itself out of the damage caused by CV19. World trade will diminish with weaker economies and rising protectionism/nationalism. This will result in a period of consolidation and change which will affect the markets.

With the scaling down of JobSeeker and JobKeeper, I would expect worse results from most non-infrastructure related businesses and for some investors to sell shares to raise capital for living expenses.

I have no edge in forecasting markets.

Without a vaccine it will be a long slow recovery with many industries struggling to survive. Tourism, International Students education,

So many new investors coming into the market without experience leads eventually to last stage of bull market

Predictions are fraught with danger, especially predictions about the future

The US election, and possible delays in determining a winner, may dampen markets. This could affect confidence and, combined with the underlying economic problems from COVID, could lead to a sell-off. A Biden win could also dampen the share market in the short term as he may be seen as less supportive of big business.

 

5 Comments
Brian
September 17, 2020

I was stunned by these comments. These are from AUSTRALIANS, but you would think they were from Americans – there seems a surprising lot of support for Trump.

From the people I have spoken with, no one supports Trump, but these comments show that a lot of Australians do. They even say the Democrats will only win if BIDEN cheats!!!....and Trump has delivered on most of his promises!!....who are these guys!!

It just shows what people are prepared to overlook for the sake of financial gain, which is obviously Trump’s forte. Even if Biden is old and struggling, he will have a support team that won’t just be yes men, and so make better decisions for the people rather than just one man.

Bob
September 17, 2020

As a Yank living in Australia, I am amazed at how naive most of the pro-Trump comments are (or maybe some of those commenters really are into US politics and are real Trumpers). Viewing Trump from afar (e.g., from Australia) is difficult without a real understanding of Trump's background (I grew up in NY area where the locals have long-term keen understanding of Trump's grifting), disregard of facts (as opposed to his contrived "alternative facts"), management style of forcing results to fit his mind and narrcissist disregard for others (including his own followers who he bends to his will, but despises).

I find that when I have debated Trumpers and knocked down their arguments for following him, the fall-back factor is "Well, he is a great businessman." . . . which he most certainly is not. That's where the grifter factor started. Maybe more par for a NY property developer, but certainly not for most powerful person on the planet. His faith in himself is unbounded though he is destined to lead US into failure much as his businesses have experienced or will eventually (his only businesses left are licensing and investment scams, not to mention money laundering and tax gimmicks and evasion which in itself is a major industry in the US). There is no legitimate business model other than a smoke-and-mirrors deception that is inevitably found out. I say this from perspective of lawyer and management at large multinational corporations and professor at US B schools.

Maybe a more vivid way to convey this is to ask whether you want him in charge of the nuclear codes. If his businesses have or inevitably will come up bankrupt, to what does bankruptcy equate in government, international and nuclear terms?

A final small afterthought: One of the comments cited Biden's corruption. What? Biden corrupt? You may not like the bloke, but corrupt in any meaningful sense he is not. And if you still find a skerrick of corruptness by tortured logic, Trump is a walking textbook in corrupt.

Unfortunately, getting rid of Trump is just the start of recovery correcting his distortions of politics, international relations, financial markets, etc. will take time. Yes the wealthiest will give back the Trump hand-outs if Biden wins, but everyone (including the wealthy) will be better off in the longer-term for having rational political and business models that don't reward groveling to the mob-like Trump model.

Steve
September 19, 2020

As an aussie who lived in America I find your comments a tad naive. Really, you thought you could 'debate' with a Trump supporter?? Debates rely on a certain level of rational susceptibility, for others to appreciate through reasoned argument your views. You can see where I'm going here. Its the same as thinking you can 'debate' evolution with a born again christian. The textbook definition of futility. It's a common mistake the dems make, thinking that their reasoned arguments will resonate with a largely dumbed down electorate. And then wonder why the election went so poorly. Plus America is clearly a centre-right democracy and pushing further left is a net loss of votes (may not vote for Trump, but just won't bother voting at all).

Alex
September 17, 2020

Research shows a high majority of Australians think Trump is a turkey but they don't understand the forces that make it likely he will win. 50 million Americans love him.

Bob
October 18, 2020

"50 million Americans love him"
Sadly that's says more about the average American than it does Trump.....

 

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