The 10 FAQs You Have Been Asking On US Elections 2020 October 30, 2020

The 10 FAQs You Have Been Asking On US Elections 2020

This article is part of the US Election series brought to you by POEMS. #USElection2020.

The US election is less than a week away and many pressing questions remain.

Our analysts have rounded up the top 10 most frequently asked questions on the potential impact on markets. Check out our previous US Election Scenario Analysis, All You Need to Know as An Investor, Impact of Tax Policies on your Investments, Understanding the Impact on the Tech Sector, US-China Trade War Timeline, A Health Check of US Election 2020 and more.

The top 10 questions on investors’ minds:

1. What happens if election results are contested?

Even if the election outcome is contested, the country will have a President on Inauguration Day on 20 January 2021, according to the Constitution and federal law. After the polls on 3 November, the 51 American states will have more than a month to count the ballots, including mail-in ballots, and recount if necessary. The states’ electoral votes have to be cast by 14 December, and the candidate with 270 or more votes wins. On 6 January 2021, a joint session of the Congress will convene. The results will be certified by the existing Vice-President. The elected President and Vice President will be sworn in on Inauguration Day.

However, if election issues prevent a winner from being named, the 12th Amendment of the Constitution kicks in. This provides for the House of Representatives to elect the President and the Senate, the Vice-President. The new Congress that will be formed in January will be tasked with carrying out this “contingent election”. If that also fails and the House does not elect a President by Inauguration Day, the 20th Amendment takes over. This stipulates that the Vice President-elect acts as President until a President is picked. And if no Vice-President is selected by Inauguration Day either, the Presidential Succession Act applies. This says that the Speaker of the House of Representatives, the Senate President or a Cabinet officer, in that order, would act as President until there’s a President or Vice-President.

2. What are the implications of a Democratic victory? What are the highlights of the Democrats’ agenda?

Joe Biden’s impact on Wall Street is likely to differ from that of Donald Trump. Biden’s proposal to raise corporate taxes will be closely watched. Taxes can hurt or benefit corporate profits a fair bit. Trump’s corporate tax rate cut from 35% to 21% in 2017 boosted US corporate earnings by 8-10% in 2018.

See our report, Phillip Macro – US Elections Scenario Analysis, for details.

3. What are the implications of a Republican victory? What will be their focus in a second term?

The “America First” agenda remains at the heart of the Republican campaign. US incumbent presidents have won re-election 63% of the time. Since the American Civil War, only those with an economic recession during their first term were unsuccessful.

See our report, Phillip Macro – US Elections Scenario Analysis, for details.

4. What happens if the President refuses to leave office after he loses the election?

There could be a few scenarios. The US Supreme Court may be asked to decide on whether the President has been selected and the status of key state votes. If the Supreme Court does not want to step in, there could be more uncertainty. While there are concerns that the military may be called in, General Milley, who is Trump’s top military adviser and chairman of the Joint Chiefs of Staff, has proclaimed that the military will not be involved in the election process and he will not follow “an unlawful order”.

5. Which sectors would be most affected by a Biden victory?

In a Biden win, the clean energy and industrial sectors may benefit. Biden has a green agenda in which one of his spending policies is to build energy-efficient infrastructure. His infrastructure bill also leans towards boosting highways, transit and green energy, potentially benefiting related industries.

In the energy sector, he may impose tougher climate-change rules and freeze public land fracking. His corporate tax hike proposal and intention to crack down on abusive lending practices and strengthen the oversight of consumer lending could also be negative for the financial sector. In healthcare, both political parties want to lower out-of-pocket costs by lowering drug pricing. Biden is more likely to make this happen. This could affect the pharmaceutical sector.

Check out what our analysts think of the potential policy impact here and here.

6. Which sectors would be most affected by a Trump re-election?

In a Trump win, the energy, financial and industrial sectors may benefit. He has plans to pull out of the Paris Climate Agreement and roll back limits on methane emissions. He favours energy deregulation, which would be positive for the sector. Banks booked record profits under Trump in 2018, partially thanks to his tax cuts. The “Volcker Rule” was also eased and smaller banks did not have to undergo stress tests. So generally, a Trump re-election will be positive for the financial sector. Trump also signalled an infrastructure bill previously, with spending on roads, bridges and public transport. This would boost selected industrial sectors.

Check out here and here.

7. How will the swing states determine the election outcome?

Currently, eight potential swing states – Arizona, Florida, Georgia, Michigan, Minnesota, North Carolina, Pennsylvania, and Wisconsin – have taken 127 Electoral College votes, out of a total of 538. To increase the chances of election, it is crucial to secure these states. Back in 2016, Trump won the election by winning in seven out of the eight swing states, with 0.3-0.7% marginal leads in Pennsylvania, Wisconsin and Michigan. He will need to pull off what he did in 2016 again. His main battleground will be Florida, which carries 29 electoral votes.

8. What would be the impact on US-China relations if Biden wins?

Both Biden and Trump have a common strategic purpose of de-coupling from China and moving critical manufacturing supply chains back to the U.S. Biden’s way of de-coupling is to work through the World Trade Organization and combine with allies to put pressure on China. Multilateral approaches tend to be more predictable. He also aims to reinstate the Trans-Pacific Partnership, which is likely to increase US influence over the Asia-Pacific while countering China’s growing power. Contrast this with Trump, who is tougher on China and may impose further tariffs on non-compliance.

9. Can you win the popular vote and still lose the election?

There have been five presidential elections in which the winner did not receive a plurality of the popular vote*. The five included the 1824 election, the first US presidential election when the popular vote was recorded. Instead of the nationwide popular vote determining the outcome of the election, the President of the US is decided by votes cast by electors of the Electoral College. This means that when Americans cast ballots in a presidential election, they are choosing electors and telling them which candidate they think their states’ electors should support. The presidential elections of 1876, 1888, 2000 and 2016 produced an Electoral College winner who did not receive the most votes in the general election. During the last election in 2016, Democratic nominee Hillary Clinton won 2.1% more of the popular vote than Donald Trump, but Trump went on to become President.

*A plurality vote in the US is like the relative majority in the UK and Commonwealth. In a plurality vote, a candidate polls more votes than any other but does not receive more than half of all the votes cast.

10. When will the result become official?

The result is usually called on the night of Election Day. This year, it will be 3 November. The result can become official if either Trump or Biden declares victory and the result is uncontested. Otherwise, the deadline for resolving poll disputes under the 1887 Electoral Count Act is 8 December. Should either or both refuse to concede, they can take the election fight to the Congress. Under the Constitution, Congress has the responsibility to count Electoral College votes. Should the Democrats and Republicans agree that no President has been selected, the Supreme Court may be asked to step in.

Continue to follow us on our US Election series as we bring you the lowdown on the various sectors leading up to 3 November 2020.


These commentaries are intended for general circulation. It does not have regard to the specific investment objectives, financial situation and particular needs of any person who may receive this document. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of the units and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. Investors may wish to seek advice from a financial adviser before investing. In the event that investors choose not to seek advice from a financial adviser, they should consider whether the investment is suitable for them.

The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries.

Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned.

About the author

Yeap Jun Rong (Research Analyst) and Terence Chua (Senior Research Analyst)

Jun Rong currently covers the U.S market, with focus on FAANG stocks. Previously an investment specialist, he constantly keeps in touch with the latest market trends to serve the needs of clients. Jun Rong also features in different media platforms such as Channel 8’s Morning Express show and provides market commentary for various newspaper like LianHe ZaoBao (联合早报) and Business Times. Jun Rong graduated from National University of Singapore (NUS) in 2017 with a Bachelor of Social Sciences with major in Economics.

Terence specialises in the consumer and industrials sector. He has over five years of experience as an analyst in the buy- and sell-side. As an institutional fund management analyst, he sat on the China-Hong Kong desk. Terence was ranked top 3 for Best Analyst under the small caps and energy category in the Asia Money poll 2018.

He graduated from the Singapore Management University with a major in Finance (Honours), and is the honoured recipient of the CFA scholarship.

Contact us to Open an Account

Need Assistance? Share your Details and we’ll get back to you


This material is provided by Phillip Capital Management (S) Ltd (“PCM”) for general information only and does not constitute a recommendation, an offer to sell, or a solicitation of any offer to invest in any of the exchange-traded fund (“ETF”) or the unit trust (“Products”) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. You should read the Prospectus and the accompanying Product Highlights Sheet (“PHS”) for key features, key risks and other important information of the Products and obtain advice from a financial adviser (“FA“) pursuant to a separate engagement before making a commitment to invest in the Products. In the event that you choose not to obtain advice from a FA, you should assess whether the Products are suitable for you before proceeding to invest. A copy of the Prospectus and PHS are available from PCM, any of its Participating Dealers (“PDs“) for the ETF, or any of its authorised distributors for the unit trust managed by PCM.  

An ETF is not like a typical unit trust as the units of the ETF (the “Units“) are to be listed and traded like any share on the Singapore Exchange Securities Trading Limited (“SGX-ST”). Listing on the SGX-ST does not guarantee a liquid market for the Units which may be traded at prices above or below its NAV or may be suspended or delisted. Investors may buy or sell the Units on SGX-ST when it is listed. Investors cannot create or redeem Units directly with PCM and have no rights to request PCM to redeem or purchase their Units. Creation and redemption of Units are through PDs if investors are clients of the PDs, who have no obligation to agree to create or redeem Units on behalf of any investor and may impose terms and conditions in connection with such creation or redemption orders. Please refer to the Prospectus of the ETF for more details.  

Investments are subject to investment risks including the possible loss of the principal amount invested. The purchase of a unit in a fund is not the same as placing your money on deposit with a bank or deposit-taking company. There is no guarantee as to the amount of capital invested or return received. The value of the units and the income accruing to the units may fall or rise. Past performance is not necessarily indicative of the future or likely performance of the Products. There can be no assurance that investment objectives will be achieved.  

Where applicable, fund(s) may invest in financial derivatives and/or participate in securities lending and repurchase transactions for the purpose of hedging and/or efficient portfolio management, subject to the relevant regulatory requirements. PCM reserves the discretion to determine if currency exposure should be hedged actively, passively or not at all, in the best interest of the Products.  

The regular dividend distributions, out of either income and/or capital, are not guaranteed and subject to PCM’s discretion. Past payout yields and payments do not represent future payout yields and payments. Such dividend distributions will reduce the available capital for reinvestment and may result in an immediate decrease in the net asset value (“NAV”) of the Products. Please refer to <> for more information in relation to the dividend distributions.  

The information provided herein may be obtained or compiled from public and/or third party sources that PCM has no reason to believe are unreliable. Any opinion or view herein is an expression of belief of the individual author or the indicated source (as applicable) only. PCM makes no representation or warranty that such information is accurate, complete, verified or should be relied upon as such. The information does not constitute, and should not be used as a substitute for tax, legal or investment advice.  

The information herein are not for any person in any jurisdiction or country where such distribution or availability for use would contravene any applicable law or regulation or would subject PCM to any registration or licensing requirement in such jurisdiction or country. The Products is not offered to U.S. Persons. PhillipCapital Group of Companies, including PCM, their affiliates and/or their officers, directors and/or employees may own or have positions in the Products. Any member of the PhillipCapital Group of Companies may have acted upon or used the information, analyses and opinions herein before they have been published. 

This advertisement has not been reviewed by the Monetary Authority of Singapore.  


Phillip Capital Management (S) Ltd (Co. Reg. No. 199905233W)  
250 North Bridge Road #06-00, Raffles City Tower ,Singapore 179101 
Tel: (65) 6230 8133 Fax: (65) 65383066