As the 2024 election cycle intensifies, TD (TSX:TD) Cowen analysts have identified three major variables reshaping the landscape, with the bank saying Kamala Harris' Vice Presidential selection is emerging as the next pivotal moment.
The three overarching themes include the Enthusiasm Gap, Electoral College Flexibility, and the Double Haters cohort.
TD Cowen says the Enthusiasm Gap has shifted significantly in favor of the Democrats. They note that since Biden's announcement on Sunday, the Democrats have raised over $250 million, experienced a surge on TikTok, and seen a notable increase in voter enthusiasm.
Furthermore, the bank states that previously, Trump voters were more engaged, driven by loyalty and excitement, particularly after the assassination attempt.
In contrast, Biden's supporters were said to have been largely voting against Trump. "For the first time, it seems as if Democrats (particularly younger voters) have something to vote for as opposed to voting against: enthusiasm replaces apathy," writes TD Cowen.
Electoral College dynamics have also transformed, according to the bank. With the enthusiasm gap closing, states like New Mexico and Maine are now considered likely out of reach for Trump. TD Cowen says that while Trump still has multiple paths to 270 electoral votes, so does Harris.
They add that unlike Biden, whose strategy was heavily reliant on the Rust Belt states of Michigan, Pennsylvania, and Wisconsin, Harris has broader geographic options, potentially running through the Sun Belt states of Arizona, Georgia, North Carolina, and Nevada, as well as the industrial Midwest. TD Cowen believes this expanded geographical strategy adds more flexibility to the Electoral College calculus.
A critical group in this election is what TD Cowen describes as "double haters," voters who hold unfavorable views of both Trump and Biden. This cohort, which represents 25% of voters, will be decisive, they believe.
Overall, TD Cowen analysts see the next significant event in this evolving political drama as Harris' VP selection, which is expected soon. Analysts see North Carolina Governor Roy Cooper as the most likely choice, followed by Arizona Senator Mark Kelly and Minnesota Governor Tim Walz.