Chinese companies see business opportunities in Trump-Biden rivalry


Kerry Allen/BBC Monitoring, Chinese Media Analyst

Given the amount of media attention being given to the US presidential candidates, many Chinese companies are trying to capitalise on “Biden” and “Trump” suddenly becoming popular search terms.

Chinese news website Pear Video notes that there’s been a surge of Chinese firms rushing to register trademarks in either candidate’s name. It cites data from China’s Trademark Office of National Intellectual Property, and says that there are currently 154 trademark listings containing the word “Trump”, and 99 containing the word “Biden”.

Many of the applications for “Trump” date back to the last election, but firms began applying for “Biden” trademarks as early as May 2018.

Many are still pending review, but some companies have already gained the right to use these names. Pear Video notes that an agricultural company in central Henan province has already registered the trademark “Trump – Biden”. As the company acts as an agent for the Chinese liquor Maotai, this has led to many speculating whether they might be seeing a US presidency-themed beverage soon on the market.

It’s common for Chinese companies to try and secure local trademarks quickly when a name or company overseas begins to get popular, and it’s a headache for big brands.

In 2016, Apple actually lost a trademark fight to a handbag and leather goods company in China, meaning the latter could continue to use the name “IPHONE” on its products.

END





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US Election 2020: All eyes on Florida in Trump-Biden battle


The final election results don’t get certified for days or even weeks, so it falls to US media organisations to predict, or project, the winner in each state much sooner. Teams of election experts and statisticians analyse a mixture of information such as exit poll data – interviews at polling stations and phone calls with early voters – and actual votes counted. In a state that always votes for one party, the results are sometimes projected as soon as voting ends, based on exit polls. In a closer contest, however, the data will draw heavily on the actual count.



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Investors pine for a ‘clear victory’ — what’s at stake for markets in Trump-Biden election showdown


Take a deep breath.

After all, it could be a topsy-turvy week for investors as remaining voters go to the polls on Tuesday, with little certainty over when a victor in one of the most bitter and most litigated presidential elections in U.S. history will be declared.

Here’s a look at what investors in stocks and other assets are bracing for in the electoral aftermath:

Worst scenario: ‘unclear outcome’

The prospect of a more contentious repeat of the drawn-out fight that followed the 2000 presidential election has stock-market investors more worried about a contested outcome than an outright win by either Democratic challenger Joe Biden or President Donald Trump, analysts said.

See: 2000 redux? Stock-market election fears have traders revisiting Bush-Gore battle

“A clear victory is most important for this election, with the worst scenario being an unclear outcome and that creates uncertainty,” said Anis Lahlou, chief investment officer of the Aperture European Innovation Fund, in emailed comments.

Biden maintained a lead over Trump in national polls, with a final Wall Street Journal/NBC News survey published Sunday showing the Democrat with a 52%-42% advantage over the incumbent, little changed from mid-October. Polls in battleground states that could determine the outcome in the electoral college continued to favor Biden overall, but have tightened.

Stocks ended higher on Monday, with the Dow Jones Industrial Average
DJIA,
+1.59%

finishing with a gain of more than 420 points, or 1.6%, while the S&P 500
SPX,
+1.23%

gained 1.2%. The Nasdaq Composite
COMP,
+0.42%

rose 0.7%. All three indexes on Friday logged their biggest weekly falls since the depths of the pandemic-induced bear market in March, with weakness tied to worries over the rise in COVID-19 cases in the U.S. and Europe and pre-election jitters.

The fear of uncertainty, analysts said, is reflected in part by elevated volatility measures. The Cboe Options Exchange’s closely followed Volatility Index
VIX,
-3.60%
,
a measure of expected S&P 500 volatility over the coming 30 days, stands at more than 30 versus is long-term average near 19. VIX futures contracts show investors don’t expect volatility to subside right away.

Read: The stock market’s ‘presidential predictor’ is forecasting a Biden victory

So if a contested outcome is the worst case, what’s the best case?

Since late summer, the market has appeared to respond best to signs of a clear-cut win for Biden accompanied by a Democratic takeover of the Senate, a so-called blue wave scenario, analysts said.

Previously, investors had appeared more wary of a Biden victory, due in part to his pledge to raise the corporate income tax cut delivered by Trump and congressional Republicans in 2017.

It’s that fear of uncertainty that partly explains why investors appeared to warm up to the prospect of a Biden victory, analysts said. Around early September, stocks began to show more positive correlation with Biden’s standing in the polls, a reversal from the earlier pattern, said Eric Lascelles, chief economist at RBC Global Asset Management, in an interview.

The shift also came as congressional wrangling over another round of coronavirus aid spending dragged out on Capitol Hill. While Trump, after initial resistance, subsequently called for a spending package even larger than the $2 trillion plan pushed by House Democrats, the two sides were unable to come to an agreement. And even if they had, opposition by Senate Republicans to another big-ticked round of spending were seen making passage of a large plan unlikely.

Given fears of the renewed spread of the virus would further threaten the economy’s rebound from the pandemic, the focus for investors shifted to stimulus prospects.

The “main” election question for investors “seems to be if federal economic support can arrive in January 2021 and counter the effects of a COVID infection surge,” said Paul Christopher, head of global market strategy at Wells Fargo Investment Institute, in a note late last week.

As a result, investors have appeared to cheer prospects for a blue wave that would see Democrats move to quickly implement a large, multi-trillion-dollar round of aid by early next year.

But the next most favorable outcome for stocks could be a Trump victory that sees Republicans retain control of the Senate (Democrats are seen as almost certain to retain control of the House).

“A victorious President Trump will be anxious to get the economy moving, and a large stimulus would undoubtedly be central to economic recovery,” said Thomas Block, policy analyst at Fundstrat Global Advisors, in a Monday note.

In that scenario, there would certainly be room for a deal on fiscal stimulus, said James Knightley, chief international economist at ING, in a note.

“However, the Republican party’s reticence to back a package of the magnitude proposed by the House Democrats in recent months means it is likely to be more modest” it would be under a Democratic sweep or a Biden victory that saw Republicans retain control of the Senate, Knightley argued.

But there also are longer term concerns. A Biden victory would see investors paying close attention to plans for corporate tax hikes, with some arguing that increases would likely be delayed until after the virus is under control and the economy is on more solid ground.

In a Trump victory, a pledge to make the corporate tax cut permanent would be viewed as a long term positive.

Investors should keep in mind that neither candidate is an “unadulterated good or bad” for the market, Lascelles said. And investors should also remember the fickle nature of the market, as well.

After all, investors rolled into the 2016 election not only expecting a victory by Hillary Clinton, but that were Trump to pull out a win, it would be bad news for markets given his strident views on several U.S. trade partners and other issues.

Stock-index futures did tank as early results pointed to a Trump victory, but the markets bounced hard before the opening bell and stocks rallied as the focus turned to corporate tax cuts and other business-friendly measures.

That’s why it’s important to take the initial market reaction to the results with a grain of salt, said Solita Marcelli, Americas chief investment officer at UBS Global Wealth Management.

“Beyond overall index levels, it will be important to watch how different indexes are reacting,” she said, including the performance of the small-cap Russell 2000
RUT,
+1.95%

versus the tech-heavy Nasdaq Composite
COMP,
+0.42%
.

“In a blue wave, small and medium-sized firms should fare better on the back of expected fiscal easing,” Marcelli said, in a note.

Meanwhile, investors should keep calm and look beyond near-term election turmoil, said WFII’s Christopher.

“Looking through this uncertainty, we continue to favor using pullbacks to put money to work in a disciplined and incremental way,” he wrote.

What about other markets? MarketWatch reporters take a look at what the election results could mean for other assets:

Government bonds

Treasury markets are expected to be among the most volatile for Wall Street as votes stream in from Nov. 3.

On one hand, investors cite the prospects of a clear Biden victory as helping to backstop the U.S. economic recovery. Biden’s ambitious fiscal plans could provide much-needed aid to an economy facing the risk around a worsening pandemic, while boosting inflation expectations that could trigger a selloff in Treasurys, pushing yields, which move in the opposite direction of debt prices, higher.

At the same time, the Federal Reserve’s aggressive monetary policy support has many analysts expecting the central bank to step in if long-term debt yields spiral higher and threaten to throttle the flow of credit.

Market participants aren’t writing off the possibility of a flight to safety after election night, either, if stocks tumble in reaction to an unclear result or other factors. That would push yields down as investors snap up haven assets like government bonds.

The 10-year Treasury note yield
TMUBMUSD10Y,
0.868%

was down 1.6 basis points Monday at 0.839%.

—Sunny Oh

Gold

Gold may benefit no matter who wins the election.

The best scenario for higher gold prices would be a blue wave, which would be likely to lead to significant stimulus spending and “up front infrastructure” spending to boost the economy, said Ross Norman, chief executive officer of Metals Daily.

The addition of significant debt on top of record debt levels would also be supportive for gold, he said.

Still, a Trump victory would likely “see more of the same” for gold, which has risen around 60% over the course of his term.

—Myra P. Saefong

Oil

Trump’s approach to the energy sector has been dubbed as “friendly” by many analysts, given that he has taken steps to promote U.S. energy independence and ease regulatory restrictions in the market. A win by Trump would “lead to more of the same,” said Stacey Morris, director of research at index provider Alerian.

U.S. oil production touched record levels during Trump’s presidency, but demand has been weak as the COVID-19 pandemic slowed activity around the globe.

If Biden is elected, however, the energy industry may face more restrictions, as the Democrat has said he opposes fracking on federal lands. Those restrictions could lead to higher oil and natural-gas prices if they hurt domestic energy output, said Morris.

Read: Here’s how the U.S. election could shake up the oil market

—M.P.S.

Junk bonds

A Biden win, despite fears around higher corporate taxes, likely won’t derail the riskiest segment of the $10.5 trillion U.S. corporate bond market.

For one thing, the Federal Reserve has promised to keep buying corporate debt as needed throughout the pandemic, including speculative-grade, or “junk bonds” that recently lost their coveted investment-grade credit ratings. But the central bank’s near-zero interest rate policy also means junk bonds remain one of the few places investors can find yields above 5% in U.S. fixed income.

What’s more, even if Biden wins and raises corporate taxes back to 28% from the Trump administration’s 21%, junk bonds could get a boost.

Here’s how Bruce Monrad, chairman of Northeast Investors Trust sees that scenario playing out. Higher corporate taxes easily could weigh down stock prices, because what “investors are willing to pay for stocks is directly based on future earnings,” he said in a recent note. But junk-bond investors “look at earnings not so much as a tool for pricing securities but to assess whether companies are financially strong enough to meet future obligations.” 

And with borrowing rates pegged to stay low, Monrad thinks junk bond defaults are unlikely to spike to anywhere near their 16% default rate during the 2000-2002 “tech wreck” from their current 5%-6% levels heading into year end. 

Instead, he sees “equity like” returns in junk bonds with more downside protection than stocks.

—Joy Wiltermuth

Dollar declines either way?

The dollar regained some ground in October as stocks faltered, but the ICE U.S. Dollar Index
DXY,
-0.58%
,
a measure of the U.S. currency against six major rivals, remains down more than 2% for the year to date. And dollar bears expect the currency to remain on a weaker path regardless of who comes out on top in the election thanks to interest-rate fundamentals and other factors no longer in the greenback’s favor.

“This year has seen a significant reverse of the sharp move in U.S. real rates that started in 2012/2013 and has been the driver of the dollar’s strength over that period,” wrote Kit Juckes, macro strategist at Société Générale, in a Monday note.

“Whether it’s President Biden or President Trump that leads the U.S. economy forwards from here, the era of dollar strength that came about when the Fed prompted the taper tantrum and the [European Central Bank and Bank of Japan] embarked on the path to massive QE and [negative] rates, is over,” he said.

—W.W.



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What the final polls say about the Trump-Biden race


FiveThirtyEight average as of Monday evening: Biden +2.6
FiveThirtyEight final 2016 “polls-only” forecast: Trump +2.4
2016 result: Trump +3.5

Befitting its toss-up status, the final live-interview poll in Arizona, an NBC News/Marist poll released Monday, showed a tied race in Arizona, 48 percent to 48 percent.

Biden does lead in the polling average, however, as other late surveys have given him the edge, including a 6-point lead in a New York Times/Siena College poll out on Sunday.

Florida (29 electoral votes):

FiveThirtyEight average: Biden +2.5
FiveThirtyEight final 2016 “polls-only” forecast: Clinton +0.6
2016 result: Trump +1.2

Biden enters the election about 2 points stronger than Clinton was in 2016, when Trump emerged with a 1-point victory.

The final live-caller poll, from Quinnipiac University, showed Biden ahead by 5 points — though Quinnipiac overestimated Democrats in the state in the 2018 midterms.

Georgia (16 electoral votes):

FiveThirtyEight average: Biden +1
FiveThirtyEight final 2016 “polls-only” forecast: Trump +4
2016 result: Trump +5.1

Georgia has raced away from Trump in the polls: He led by 4 points on the eve of the 2016 election and won by 5 — the rare state where Trump didn’t overperform significantly on Election Day.

He and Biden are neck-and-neck now, with the Democrat a point ahead in the FiveThirtyEight average.

Iowa (6 electoral votes):

FiveThirtyEight average: Trump +1.4
FiveThirtyEight final 2016 “polls-only” forecast: Trump +2.9
2016 result: Trump +9.4

The most promising news for Trump in the polls in the 72 hours before the election came from Iowa, where a Des Moines Register/Mediacom poll showed the president ahead by 7 points.

That’s out of line with the average, which showed a closer race. But the Register’s final poll was also better for Trump than the average in 2016 — and it was right.

Michigan (16 electoral votes):

FiveThirtyEight average: Biden +8
FiveThirtyEight final 2016 “polls-only” forecast: Clinton +4.2
2016 result: Trump +0.2

Biden’s 8-point advantage in Michigan — the state Trump won by the narrowest margin in 2016 — is nearly twice Hillary Clinton’s pre-2016 lead.

The live-interview polls in the final two weeks of the race gave Biden a lead between 7 and 12 points. They’d have to be way off for Trump to win there again.

Minnesota (10 electoral votes):

FiveThirtyEight average: Biden +9.4
FiveThirtyEight final 2016 “polls-only” forecast: Clinton +5.8
2016 result: Clinton +1.5

Trump’s narrow loss in Minnesota was an underrated surprise from 2016. But in order to make a real challenge there this year, he’d have to overcome a bigger Biden advantage of nearly 10 points.

Nevada (6 electoral votes):

FiveThirtyEight average: Biden +4.8
FiveThirtyEight final 2016 “polls-only” forecast: Clinton +1.8
2016 result: Clinton +2.4

Nevada was another state where Trump didn’t overperform his polls in 2016. That makes his current 5-point deficit appear more daunting.

New Hampshire (4 electoral votes):

FiveThirtyEight average: Biden +11.1
FiveThirtyEight final 2016 “polls-only” forecast: Clinton +3.6
2016 result: Clinton +0.4

Trump’s narrow 2016 loss in New Hampshire came after entering Election Day within 4 points in the polls. He’s down by at least twice that now: Two in-state academic pollsters showed Biden ahead by 8 points last week.

North Carolina (15 electoral votes):

FiveThirtyEight average: Biden +1.9
FiveThirtyEight final 2016 “polls-only” forecast: Clinton +0.7
2016 result: Trump +3.6

As in 2016, the polls are tight in North Carolina. There’s a slight gap between the live-interview polls — the final two, from CNN/SSRS and NBC News/Marist, showed Biden ahead by 6 points — and web surveys showing essentially a tied race.

Trump out-ran his polls there in 2016, winning the state by almost 4 points. It was an early sign the night was breaking his way in a state where the polls close early (7:30 p.m. Eastern).

Ohio (18 electoral votes):

FiveThirtyEight average: Trump +0.7
FiveThirtyEight final 2016 “polls-only” forecast: Trump +1.9
2016 result: Trump +8.1

This is the only one of the 13 states in this analysis where Trump currently leads in the polling average — even after a Quinnipiac poll out on Monday gave Biden a 4-point advantage.

Pennsylvania (20 electoral votes):

FiveThirtyEight average: Biden +4.8
FiveThirtyEight final 2016 “polls-only” forecast: Clinton +3.7
2016 result: Trump +0.7

Biden is in better shape than Clinton in the most-likely tipping-point state — but not by much. He’s ahead by around 5 points, just a little above Clinton’s nearly 4-point lead four years ago.

Trump’s only leads are in surveys by two Republican pollsters, while the other surveys show Biden ahead — and, in a key difference from 2016, at or above 50 percent. That includes two surveys on Monday: an NBC News/Marist poll showing Biden ahead, 51 percent to 46 percent, and a Monmouth University poll showing similar numbers among its various turnout models.

Texas (38 electoral votes):

FiveThirtyEight average: Trump +1
FiveThirtyEight final 2016 “polls-only” forecast: Trump +8.5
2016 result: Trump +9

Unlike some of the core battlegrounds, polling in Texas has slowed down at the end of the election. But Trump is entering with only a 1-point lead — a troubling sign after he essentially matched his polls when he won the state by 9 points in 2016.

Wisconsin (10 electoral votes):

FiveThirtyEight average: Biden +8.2
FiveThirtyEight final 2016 “polls-only” forecast: Clinton +5.3
2016 result: Trump +0.8

Of the Great Lakes battleground states Trump flipped in 2016, coronavirus-ravaged Wisconsin has been his weakest in public polling. The final New York Times/Siena College poll showed Biden ahead by 11 points — though Trump is a little closer in other surveys.



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Trump-Biden polls: Who will win the 2020 election if 2016 polling error happens again?


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Here’s what could happen to stock markets if the Trump-Biden election results are contested


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The 2020 election will likely be controversial—in more ways than one.

With a wrench thrown into traditional voting procedures because of the coronavirus pandemic, partisans on both sides of the aisle are already tossing around the possibility of a messy election—and perhaps one where one side contests the results. And for investors, uncertainty means one thing: volatility.

To be sure, even in 2016 when the outcome wasn’t formally contested, markets briefly panicked after Donald Trump secured the presidency, before recovering (and, indeed, rising considerably) in the following days. But when results are debated and investors are left in limbo, things can get especially dicey, analysts at UBS say.

“If history is any guide, we would expect to see some initial equity market volatility as investors grapple with the resulting policy uncertainty,” Thomas McLoughlin, head of Americas fixed income at UBS Global Wealth Management, wrote in a note Monday. “Markets abhor uncertainty.”

Democrats have already raised their concern that Trump will interfere with the election, especially given concerns about the dependability of mail-in voting through the embattled and budget-challenged U.S. Postal Service. Trump himself postulated at a White House event on Tuesday that if the election involved a large number of mail-in ballots, “It’ll end up being a rigged election, or they will never come out with an outcome. They’ll have to do it again. And nobody wants that, and I don’t want that.”

The upshot? Investors should probably buckle up for a bit of a bumpy ride come November.

What happened in 2000?

The most relevant and “instructive” example of what happens to markets when an election result is contested is the Bush-Gore presidential contest in 2000.

George W. Bush, the Republican nominee and then-governor of Texas, lost the popular vote to Vice President Al Gore. The contest was decided in the Electoral College, where the result hinged on who won the state of Florida, where voting tallies were hair-raisingly close. “The subsequent recount was exceptionally time-consuming,” UBS’s McLoughlin writes. The Supreme Court eventually intervened to let stand a preliminary count that awarded Bush the state. Gore conceded, and Bush secured the victory roughly six weeks after Election Day.

In that interim, “Markets initially reacted negatively to the absence of a clear winner. London’s FTSE surged on news that … Bush had won but gave up the gains on news of the planned recount,” McLoughlin notes. The S&P 500 dropped roughly 6% in the two weeks following the election, Fortune calculated, while the Dow fell around 5% in the two weeks “as litigation threatened to prolong the uncertainty,” McLoughlin writes.

Litigation is a key concern for 2020, too: McLoughlin suggests that “this year’s election is likely to be the most litigated in history.” He writes that by some counts plaintiffs have “already filed 192 lawsuits in at least 41 states across the nation arising from changes to voting procedures in the wake of the pandemic,” plus others that predated the pandemic.

The good news is that the market volatility in such cases is generally short- lived, UBS notes. In fact, McLoughlin points out that subsequent research has shown the worst impact to markets comes within four trading days of an “uncertain election outcome.”

Current polls show presumptive Democratic nominee and former Vice President Joe Biden with an edge over the incumbent. Analysts at firms including JPMorgan Chase have suggested that investors shouldn’t be too concerned about a Biden presidency—and argue he may actually be good for stocks.

“It’s not the case that the minute there’s a changeover in the White House, everything on the campaign platform becomes policy,” Charles Schwab chief investment strategist Liz Ann Sonders recently told Fortune. “I do happen to think a Biden presidency isn’t this guaranteed disaster for the stock market.”

Yet with all the moving pieces, the headline for investors here is to be “prepared for volatility in the event of an inconclusive result,” says McLoughlin. That said, fleeing into “safe haven” assets like gold or treasuries may be premature. Adds McLoughlin: “Any initial volatility should dissipate over time.”

More must-read finance coverage from Fortune:



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Top issues in 2020 election: Coronavirus handling tops U.S. economy, race issues as Trump-Biden matchup heats up


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FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.
Quotes delayed at least 15 minutes. Market data provided by Interactive Data. ETF and Mutual Fund data provided by Morningstar, Inc. Dow Jones Terms & Conditions: http://www.djindexes.com/mdsidx/html/tandc/indexestandcs.html.
S&P Index data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Terms & Conditions. Powered and implemented by Interactive Data Managed Solutions.



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