Goldman Sachs Says The Markets Point To Trump Advantage In 2020
President Trump has the advantage for 2020 if the economy stays on track, according to Goldman Sachs economists.
Goldman analysts Alec Phillips and Blake Taylor wrote that Trump has advantages over the Democrats, in a report released Saturday and covered by Bloomberg.
“The advantage of first term incumbency and the relatively strong economic performance ahead of the presidential election suggest that President Trump is more likely to win a second term than the eventual Democratic candidate is to defeat him,” analysts wrote.
Goldman’s economic forecast predicts 2.5 percent growth for the U.S. economy this year, and 2.3 percent for next. According to the investment bank, that pace bodes well for incumbent Trump, since they predict this will reduce unemployment to 3.3 percent.
“Prediction markets” are not as optimistic about Trump’s victory. “While we believe the majority of market participants expect President Trump to win a second term, we note that prediction markets point in the opposite direction and imply that the Democratic candidate has a 56% probability of winning and the Republican candidate has a 44% chance,” the report said, according to Yahoo Finance.
Analysts felt that market-based indicators like equity or oil prices were not as reliable as employment and income variables when predicting election results, the Bloomberg article also noted.
In early November 2016, the same Goldman analyst Phillips predicted that the race was tightening, but that Hillary would likely secure the presidency. “Clinton is still seen as twice as likely to win the White House next week as Mr Trump, ” he said in an article for Australian Financial Review.
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