Presidential Election Chartbook - BBVA Research · Presidential Election Chartbook July 2016 ... Medicaid Expansion States *most recent available data used: life expectancy (2014),

Presidential Election

JULY

2016

Chartbook 1

Bottom Line

• Favorability of 2016 election candidates is historically low

• Economic and market-based indicators continue to suggest Democrat win in

November, although geopolitical turmoil and volatility has reduced the lead

for Democrats in our national vote-share model

• Issues that will reign throughout the campaign include investment in

infrastructure, research & development, education, healthcare costs, and

broad access to opportunity

• Polarization is lowering the likelihood of comprehensive reform

• Despite “do or die” campaigning, historical evidence suggests that neither

party is significantly better at producing economic growth or market returns

DISCLAIMER: The economic-based election forecasts contained herein reflect economic conditions at the time of the forecast and are subject to change in tandem with economic conditions.

Presidential Election Chartbook July 2016

Election 2016 shaping up to be a contest between

two historically unpopular candidates Net Favorability Trend

%

Net Favorability

%

*Figures based on monthly averages of registered voter polls Source: BBVA Research, New York Times/CBS & Real Clear Politics

0

5

10

15

20

25

-60

-50

-40

-30

-20

-10

0

10

20

Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16

Clinton Polling Spread* (rhs)

Clinton Net Favorability

Trump Net Favorability

3

Reagan

Bush, H. W.

Bush, H. W.

Dole

Bush, W.

Bush, W.

McCain

Romney

Trump

Mondale

Dukakis

Clinton, B.

Clinton, B.

Gore

Kerry

Obama

Obama

Clinton, H.

-30

-20

-10

0

10

20

30

1984 1988 1992 1996 2000 2004 2008 2012 2016


Twitter wars

0,7 “Next week in

Cleveland, Repuplicans

will nominate someone

who thinks “Latino

outreach” is tweeting

out a picture of a taco

bowl.”

@HillaryClinton

“After today,

Crooked Hillary can

officially be called

Lyin’ Crooked

Hillary.”

@realDonaldTrump

46

8 8 5

crooked lying/lies badjudgement

corrupt

Trump re: Clinton*

6

2 2 2

dangerous unfit cheating reckless

Clinton re: Trump*

Source: candidates’ official Twitter accounts

* Most common adjectives used to describe opposing candidate from June 15-July 15, 2016

TWEETS: 6,536

FOLLOWING: 673

FOLLOWERS: 7.4M

*as of 7/15/16

TWEETS: 32.6K

FOLLOWING: 41

FOLLOWERS: 9.76M

*as of 7/15/16

4


Trump’s Platform Word Cloud* Clinton’s Platform Word Cloud*

Heart of the matter

*Graphic visualizes key messages from both candidates’ issues and positions pages

from their official websites

Source: BBVA Research

5


New administration faces challenge of promoting

broad job and income gains Post-Crisis Jobs Recovery Millions

Inflation-adjusted Median Household Income Index, 1990=100

Presidential Job Creation Thousands

Despite so-so job creation, 95% of jobs

have gone to college educated

Income growth for highest skilled

These trends can deepen frustrations

with status quo and increase populism

-10,000

-5,000

0

5,000

10,000

15,000

20,000

25,000

90847872666054484236302418126

Obama Bush (W.) Clinton Reagan

80

90

100

110

120

130

1990 1993 1996 1999 2002 2005 2008 2011

HS Diploma Some College College Grad

-2

-1

0

1

2

3

4

5

6

7

2009 2010 2011 2012 2013 2014 2015

No College Some College College Grad +

Source: BBVA Research & Haver Analytics 6


-5

0

5

10

15

20

1950's 1960's 1970's 1980's 1990's 2000's 2010's Average

Government Private (Non-res)

Fiscal policy: Not all about deficits Revenues and Expenditures Share of GDP, %

Real Fixed Investment Average YoY%

Government Debt & Financing Costs Share of GDP, %

Budget gap closing, as economy recovers

to potential

Real government investment contracting

to historic lows

Costs of financing trillion dollar

infrastructure deficit low

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

22.0%

24.0%

1995 2000 2005 2010 2015

Receipts Outlays ex interest payments

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

0

20

40

60

80

100

120

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

U.S. Debt-to-GDP Avg. Interest Rate

Source: BBVA Research & Haver Analytics

7


Need to strengthen human capital Top priorities for U.S. Policy Makers % of Respondents

PISA Scores Relative to OECD Average Standardized by OECD avg.

Federal Investment in Research & Development Share of GDP (%)

Public investment in R&D near historic lows

Despite ranking poorly amongst developed

economies, divisions remain on importance of

education1

To remain competitive, educational outcomes

need to improve

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

Nondefense Defense

505560657075808590

Jan-9

7

Jan-9

8

Jan-9

9

Jan-0

0

Jan-0

1

Jan-0

2

Jan-0

3

Jan-0

4

Jan-0

5

Jan-0

6

Jan-0

7

Jan-0

8

Jan-0

9

Jan-1

0

Jan-1

1

Jan-1

2

Jan-1

3

Jan-1

4

Jan-1

5

Jan-1

6

Economy Terrorism Education

-2

-1

0

1

2

3

4Math Reading Science

Source: BBVA Research, OECD, Pew Research Center & Haver Analytics 1 See Slide 10 for more details

8


Healthcare: Much to be done Uninsurance Rates for Adults Ages 18-64 %

National Health Expenditures, Per Capita $, YoY % change

Health Expenditure and Life Expectancy in OECD Countries* Current Prices (USD PPP), years

Insurance coverage growing after ACA, but

reforms have yet to “bend the cost curve”

Although per capita health spending is

highest in OECD, outcomes compare poorly

Looming healthcare crisis?

21.7%

14.1%

17.4%

9.9% 14.9%

7.3%

0%

5%

10%

15%

20%

25%

Medicaid Nonexpansion States

All Adults

Medicaid Expansion States

*most recent available data used: life expectancy (2014), spending (2015)

CHL CZE

DEU GRC

JPN

MEX

NOR

CHE

TUR USA

72

74

76

78

80

82

84

86

0 2,000 4,000 6,000 8,000 10,000

To

tal L

ife E

xp

ecta

ncy a

t B

irth

Expenditure on Healthcare per Capita

0%

1%

2%

3%

4%

5%

6%

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

20

21

20

22

20

23

20

24

20

25

NHEYoY growth (rhs)

Projected

Source: BBVA Research, OECD, Urban Institute & Center for Medicare and Medicaid Services

9


Polarization a risk to policy making

Income Inequality & Polarization

Ideological Priority

Centripetal force pulling on party centers

Some evidence that disparate outcomes

are connected to political polarization

Limited progress on structural reforms,

as issues remain highly politicized

Ideological Distribution

Republican Democrat Ind R-D

Gun Policy 13 57 36 -44Climate Change 14 55 41 -41Environment 26 61 49 -35Education 47 76 71 -29Poor 34 63 59 -29Criminal Justice Reform 32 49 47 -17Job Situation 53 68 65 -15Medicare 55 64 60 -9Crime 54 62 56 -8Health Care Costs 59 64 60 -5Global Trade 33 28 32 5Social Security 67 62 60 5Economy 80 74 76 6Taxation 52 40 45 12Terrorism 87 73 70 14Budget Deficits 70 48 54 22Immigration 66 43 51 23Military 76 33 53 43

Source: BBVA Research, Pew Research Center & World Bank

0.6

0.7

0.7

0.8

0.8

0.9

0.9

1.0

1.0

0.30

0.32

0.34

0.36

0.38

0.40

0.42

0.44

0.46

0.48

1947 1953 1959 1965 1971 1977 1983 1989 1995 2001 2007 2013

Gini (rhs) Polarization

10

%

%


BBVA Research National Vote-Share Results*

Geopolitical tensions, financial turmoil and desire

for “change” increase GOP chances

Last available

Source: BBVA Research & PredictWise

Candidate Market Odds

Tim Kaine 52% 30%

Elizabeth Warren 14% 19%

Tom Vilsack 13% NA

Tom Perez 6% 7%

Julian Castro 4% 13%

Cory Booker 4% 10%

Bernie Sanders 2% 6%

Democrat VP Candidate Probabilities

*Estimates based on linear vote-share regression (%)

35%

40%

45%

50%

55%

60%

65%

195

2

195

6

196

0

196

4

196

8

197

2

197

6

198

0

198

4

198

8

199

2

199

6

200

0

200

4

200

8

201

2

201

6

Actual Dec. 2015 Feb. 2016 Jul. 2016

GOP Majority

Democrat Majority

11


BBVA Research State Vote-Share Projection

At state-level, Dems leading despite polling

margins shrinking in key swing states

Source: BBVA Research

• State-level projections show Democrats gaining

EC votes (318 (D) vs. 217(R) in February)

• Florida has seen largest shift in polling

• Current polling suggests Clinton leading in OH

-2

0

2

4

6

8

10

12

Florida Wisconsin Virginia N.Carolina

Penn. Colorado Ohio

Today

3-months ago

Polling Data (Clinton-Trump)

323 Dems

212 GOP

12


Doomsday scenario unlikely despite projections

that candidates would imperil the economy

President

1953-2015

Real GDP

Volatility

Real GDP

%

Growth

Unemployment

Rate, %

Inflation,

%

10-year

Treasury,

%

S&P500

% change

Real

Income

per capita,

%

Payroll,

%

change

Home

Ownership

, %

Deficit %

GDP

Debt %

GDP

Income

Inequality,

Gini

Rep (36yrs) 2.3 2.8 5.9 3.9 6.7 6.6 2.0 1.4 65.5 -2.2 50.7 0.39

Dem (27yrs) 2.1 3.5 6.0 3.2 5.2 10.2 2.2 2.2 65.1 -2.5 62.2 0.40

Economic Performance

Economic Health Index, >0=better

Source: BBVA Research & Haver

-15

-10

-5

0

5

10

15

1953

1955

1957

1959

1961

1963

1965

1967

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

Rep

Dem

Index

13

DISCLAIMER

This document was prepared by Banco Bilbao Vizcaya Argentaria’s (BBVA) BBVA Research U.S. on behalf of itself and its affiliated companies (each BBVA Group Company)

for distribution in the United States and the rest of the world and is provided for information purposes only. Within the US, BBVA operates primarily through its subsidiary

Compass Bank. The information, opinions, estimates and forecasts contained herein refer to the specific date and are subject to changes without notice due to market

fluctuations. The information, opinions, estimates and forecasts contained in this document have been gathered or obtained from public sources, believed to be correct by the

Company concerning their accuracy, completeness, and/or correctness. This document is not an offer to sell or a solicitation to acquire or dispose of an interest in securities.

[email protected]

www.bbvacompass.com/compass/research/

@BBVAResearchUSA https://twitter.com/BBVAResearchUSA

BBVA ResearchUSA

http://vimeo.com/bbvaresearchusa

http://bbvaresearchusa.podbean.com/

Connect with Us:

Previous Presidential Election Chartbooks https://www.bbvaresearch.com/wp-content/uploads/2016/03/Election-Chartbook_March-2016_Final3.pdf

https://www.bbvaresearch.com/wp-content/uploads/2015/12/Election-Chartbook-December-2015_final.pdf



http://www.bbvaresearch.com/wp-content/uploads/2016/03/Election-Chartbook_March-2016_Final3.pdf


















Presidential Election Chartbook - BBVA Research · Presidential Election Chartbook July 2016 ... Medicaid Expansion States *most recent available data used: life expectancy (2014),

Documents