Former Vice President Joe Biden currently leads Republican incumbent President Donald Trump by a handsome margin with less than a month remaining before the Nov. 3 election.
However, the memory of 2016’s stunning win by Trump, over Democrat Hillary Clinton despite her lead in the polls have investors, poll watchers and regular Americans hesitant to call this race a done deal for Biden.
To be sure, Clinton did win the popular vote by over 2%, but ultimately, Trump received 304 electoral college votes and Clinton 227, after two electors defected from Trump and five defected from Clinton.
One analyst notes though that a win by Trump, despite Biden’s large lead in current polling, would represent one of the biggest errors in polling history in the modern era .
Deutsche Bank strategist Jim Reid in a Wednesday note writes that the largest polling error thus far in modern history was Democrat President Harry S. Truman’s apparent upset victory over then New York Gov. Thomas E. Dewey, a Republican, in the 1948 race that often recalls the erroneous headline in the Chicago Daily Tribune the following day that read “Dewey Defeats Truman.”
Truman won that race by 5 percentage points despite lagging behind in final polls leading up to Election Day by 4.4 percentage points, Reid writes (see included chart).
A Trump victory, however, would be a decidedly greater error in polls.
“A Truman style error in the polls may give Mr Trump a chance given the electoral college system, but the reality is that – unless the polls narrow into election day – a Trump victory would be the biggest error in our modern era of mass polling,” the Deutsch Bank analyst writes.
An average of national polls from RealClearPolitics polling currently shows Biden with a 9.2 percentage point lead over Trump, down from 10 percentage points over the past few days. On top of that, Nate Silver’s FiveThirtyEight puts the odds of a Biden win at 87%.
To be sure, Biden’s lead could narrow considerably in coming days and the nation could be looking at another 2016-style stunner for the 45th president of the U.S., who is fighting for his second term amid accusations that he mishandled the response to the COVID-19 pandemic.
At least one measure of a U.S. election outcome continues to indicate that the Trump has a better-than-average shot of emerging victorious against Biden.
The return for the S&P 500 index
over the past three-month period thus far has risen by about 7% since Aug. 3. That equity-market performance measure has been the best predictor of U.S. presidential elections since 1984, proving 87% accurate since 1928, LPL chief financial market strategist Ryan Detrick notes.
That said, the sample size from such data are relatively small. Moreover, other data indicate that few presidents have been able to garner a second term when they have presided over an economic recession, as Trump has amid the viral outbreak which forced social-distancing measures that quashed business activity for months.