US election: UBS says 'red wave' is likely coming

President Biden's underwhelming performance in the recent presidential debate with Donald Trump has sparked concern within his own party, with Democratic leaders and donors increasingly vocal about their doubts regarding his capability to endure another four years in office.

Despite growing calls for him to step aside and withdraw from his re-election campaign, Biden has firmly reiterated his intention to seek the nomination.

Although there are still four months until Election Day, it is notable that Biden's national poll numbers have declined following the June 27 debate. A recent New York Times/Siena College survey indicates that he now trails former President Trump by 5-6 points among likely voters.

“Biden’s path to a second term was already narrow before the debate based upon recent polls in the pivotal states critical to an Electoral College victory,” UBS strategists said in a Sunday note.

“New state-by-state polls are expected in the days and weeks ahead,” they added.

Until President Biden announces a final decision on whether to withdraw, UBS believes it is premature to speculate too much on hypothetical matchups between Trump and other contenders, including Vice President Harris. Regardless of the nominees, strategists expect both political parties to prioritize voter turnout in November as the decisive factor in the election's outcome.

“Democrats must motivate younger voters,” strategists wrote. “Republicans must encourage voters who prefer Trump to express that sentiment reliably at the polls on Election Day.”

UBS has revised its election outcome odds following 10 days of "unusual campaign activity." The bank now projects a 45% probability of a "red sweep," where Trump wins with a unified Republican Congress.

The odds for a Biden victory with a divided Congress are now at 30%, while the chances of Trump winning with a divided Congress are at 15%. The likelihood of a "blue sweep," with Biden winning and a unified Democratic Congress, stands at 10%.