When Will We Know Who Won the US Election?
- By John Tierney
- 3 min read
The initial stage is that all the states report their results. Many people think that could take days given the volume of mail-in and early voting. But the reality is that we could know the probable outcome late on election night or Wednesday morning.
This is because many states start tabulating early votes before the election and will be able to announce those results on election night. Even in those states where counting doesn’t start until election day, most use scanning technology and so they should be able to process these ballots by Wednesday.
How do we know? The New York Times helpfully compiled a table showing how every state will count mail-in and early voting, along with the expected timing of when election results should be known. The table below summarizes information for the key battleground states.
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Summary
- Results should become clear late on election night (Tuesday) or the next morning.
- Mail-in voting shouldn’t cause significant delays in counting votes due to early processing.
- Shortly after initial results, both the Trump and Biden campaigns will surely launch challenges in battleground states. Key ones to watch are Florida, Ohio, and Pennsylvania.
- For a challenge to appear credible, the result must be so close that a handful of ambiguous ballots could reverse the initial outcome.
Market Implications
- Short term – If any challenges appear credible, we expect equities to sell off, the dollar to fall, and possibly rates rally.
- Short term – If challenges lack credibility, we expect markets initially to take a wait-and-see stance, then start pricing in the initial election results.
It’s the question on everyone’s lips: when will we know who won? 2020 being a year unlike any other, it will be a two-stage process.
First, They Count the Votes…
The initial stage is that all the states report their results. Many people think that could take days given the volume of mail-in and early voting. But the reality is that we could know the probable outcome late on election night or Wednesday morning.
This is because many states start tabulating early votes before the election and will be able to announce those results on election night. Even in those states where counting doesn’t start until election day, most use scanning technology and so they should be able to process these ballots by Wednesday.
How do we know? The New York Times helpfully compiled a table showing how every state will count mail-in and early voting, along with the expected timing of when election results should be known. The table below summarizes information for the key battleground states.
The one small impediment is if the vote is so close in a critical battleground state that ballots which arrive after the election (but were postmarked on or before election day) could make a difference. Even then, we will likely know the outcome by Thursday or Friday.
…Then They Go to Court
The second stage will be contesting results in battleground states. That process could take anywhere from days to weeks. The key variable will be how close the vote is. For a challenge to have any chance of overturning the initial results, it must be so close that a small number of ambiguous or late ballots could make a difference. If the margin of victory is close but apparently clear, challenges are still likely. But absent significant new information, they will amount to little more than noise.
In our view, the key states to watch will be Florida, Ohio, and Pennsylvania. At this writing, Florida and Ohio are considered toss-ups with large electoral college votes. Pennsylvania leans towards Democratic, but it’s hard to say by how much. If the Electoral College vote is close, many observers believe Pennsylvania will be the determining factor.
Our belief is that by sometime Wednesday morning the initial vote will be sufficiently clear that both the Trump and Biden campaigns will be able to start mounting their challenges.
The other variable is which party wins control of the Senate. If control hinges on a very close vote in one or two states those results will surely be contested, leaving the outcome in limbo for days or even weeks.
Market Reaction Will Depend on Challenge Credibility
Market moves will depend on whether election results are so close that challenges could be credible and change the overall result. If challenges are credible, we would look for a sell-off in equities, possibly a rally in rates, and pressure on the dollar. If challenges appear less credible, we expect markets will initially take a wait-and-see stance, perhaps with some volatility, then start pricing in the initial election results.
Over a 30-year career as a sell side analyst, John covered the structured finance and credit markets before serving as a corporate market strategist. In recent years, he has moved into a global strategist role.
(The commentary contained in the above article does not constitute an offer or a solicitation, or a recommendation to implement or liquidate an investment or to carry out any other transaction. It should not be used as a basis for any investment decision or other decision. Any investment decision should be based on appropriate professional advice specific to your needs.)