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A batch of polls conducted after the dust settled from party conventions shows Biden enlarging his lead. President Trump may push for a larger fiscal package to increase his chances. Meanwhile, markets have room to rise after the recent downward correction, Yohay Elam, an analyst at FXStreet, reports.

Key quotes

“Providing more stimulus could win votes and help Trump be seen as capable of handling the economy. He is far behind on two other issues that matter to Americans – handling of the virus and race relations. Despite touting ‘Law and Order,’ polls have shown that voters trust Biden to provide calm rather than Trump. Moreover, the president reportedly described dead soldiers as ‘losers’ and ‘suckers’ – a message that is incompatible with supporting the military nor the police. Boosting the economy could distract attention from these topics – and also shore up equities, which have been correcting. The president partially measures his success on the performance of stock indexes.”

“Markets tend to prefer full Republican control of Congress and the White House – allowing for deregulation and lower taxes. However, there is still time ahead of the elections. Currently, investors are concerned about the lack of emergency federal help – most of that lapsed at the end of July.”

“With diminishing chances of re-election – and perhaps a delay in obtaining a coronavirus vaccine – the president may now opt to push his fellow Republican fiscal hawks toward compromising with Democrats and boosting the economy. That may boost stocks, at least in the short-term.”