According to a note from JPMorgan Chase (JPM), the market consensus points to Donald Trump winning the White House. Yahoo Finance Senior Columnist Rick Newman joins Catalysts to discuss why he thinks this position is “premature” and what the upcoming debate between the two presidential candidates could look like.

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

This post was written by Nicholas Jacobino

Video transcription

And forward to the 2024 elections.

We have a new note from JP Morgan stating that the market consensus is that Trump will win the White House.

But overall, investors aren’t that concerned about the election, at least for now, only 12% of JPM survey respondents see the upcoming election as the biggest threat to the market recovery.

Let’s turn to Rick Newman for more.

Rick.

I immediately sat up when I saw this news because we’ve all been talking about what the market is pricing in leading up to this election.

How big does this seem to you?

I think this market consensus is premature.

Uh. This race is basically a toss-up and it’s entirely possible that whatever changes the outcome, either toward Trump or Biden, assumes they both cross the finish line.

It’s possible that thing hasn’t even happened yet.

Uh, I mean, I think we have a greater risk of the black swan than you would normally have in an election, given the age of these two candidates.

And everything that’s going on with Donald Trump.

Uh, we’re going to have two debates.

Uh. The debates can be decisive, things can happen during those debates.

And let’s not forget that Trump is now a convicted felon and will be sentenced in July, when he may be sentenced to prison.

Um. So I think it would be a big mistake to assume that Trump has this in his bag.

We still have almost five months to go until Election Day and a lot can happen between now and then, Rick, you mentioned that first debate at the end of this month.

What do you think will determine the talking points in that debate?

Is it the economy, is it geopolitical risks or is it something else?

Well, I have to, I have to believe that the moderators will raise the issue of Donald Trump’s conviction in New York City Court a few weeks ago on 34 felonies.

Um, I don’t know, I don’t know that Biden himself should say too much about that.

But I think, I mean, I’d be surprised if that isn’t, you know, a huge focus of ads and billboards and swing state commercials, uh, you know, during the last two or three months after the election.

The story continues

Um, I think the moderators will ask about problems.

I mean, there’s a lot of issues at stake here, especially for investors.

I mean, the big one is these tax cuts, the 2017 tax cuts that expire at the end of 2025.

The next president will therefore play an important role in this.

There’s talk of raising the corporate tax rate if you’re Joe Biden, if President Biden gets a second term, or lowering the corporate tax rate.

If Donald Trump wins a second term, there are the tariffs Trump wants to impose on China, and many more factors for investors.

Uh, I mean, it’s, I think it’s just too early for investors to actually bet on the outcome of the election.

But I think that will change in September and October.

I think we’re going to see a much more intense focus on the polls in the six or seven swing states.

You could see the market go up or down depending on what some polls show because there are a lot of issues that the next president will have to decide that will impact the markets.