After the Debate: Key Takeaways

The first debate between President Donald Trump and Democratic nominee Joe Biden set the stage for an intense few weeks ahead of Election Day.

In the course of American politics, there are few events that draw as much anticipation and conversation as the presidential debates.

The September 29 debate between President Donald Trump and Democratic nominee and former Vice President Joe Biden was no exception. This was the first time we got to see the two face off on stage as they addressed a slew of hot-button issues including the ongoing pandemic, the future of the economy and the integrity of the entire election process.

The event took place in Cleveland, Ohio, at the Case Western Reserve/Cleveland Clinic joint campus and was the first in a series of three presidential debates before the election.

Here are a few things to keep in mind following the first debate:

1. The pandemic and the economy were front and center.

The debate didn't offer voters a lot of new information, but the economy and the pandemic were a major focus.

Biden accused Trump of not having a plan to deal with the pandemic; Trump continued to blame China for the virus and said many more lives would have been lost on Biden’s watch. The two candidates sparred over the timing of a vaccine and the necessity of shutdowns in cities across the country.

Indeed, the containment of the virus in the U.S. is likely to sway voters ahead of Election Day, as data suggests a correlation between the COVID-19 positivity rate and worries about the virus among swing-state voters. Right now, more than 200,000 Americans have died of COVID-19.

The candidates also debated the shape of the economic recovery; Trump says it’s a V-shaped recovery, where the economy has rebounded evenly, while Biden says it’s a K-shaped recovery, whereby the top earners are faring better and low-wage workers are faring worse.

To be sure, the effects of the pandemic on the economy will be a major concern for whomever wins the election. The nonpartisan Congressional Budget Office is expecting unemployment to hover around 10% through the end of 2021.

2. Tax reform is still central to both candidates’ platforms.

As we’ve discussed, Trump’s focus would be to make some of the changes of the Tax Cuts and Jobs Act of 2017 that are expiring at the end of 2025 permanent.

While Biden has pledged no income tax increases for individuals earning less than $400,000, those who earn above that amount could see their marginal tax rate increase to 39.6%. Meanwhile, capital gains and dividends tax rates could shift from a maximum of 23.8% to a maximum of 43.4% for taxpayers with income above $1 million.

During the debate, Biden defended his plan to raise taxes by $4 trillion over the next 10 years, reiterating he would reverse Trump’s tax cuts and increase the corporate tax rate to 28%. (Trump had slashed it from 35% to 21%.)

3. A contested election is still a possible outcome.

During the debate, Biden reinforced the safety of the voting system—mail-in voting, early voting and voting on Election Day. Trump stated his concerns that the voting process is rigged and ripe for fraud.

Trump reiterated that he won’t accept the results of the election if he doesn’t believe it’s honest, hinting at the possibility that the election will end up being contested. As we’ve discussed, the appointment of Amy Coney Barrett, whom President Trump has controversially nominated to replace the late Justice Ruth Bader Ginsburg, could impact the outcome of this scenario.

4. The stock market is taking a wait-and-see approach.

Historically, the first presidential debate does favor the challenger and has moved the polls by two percentage points. With Biden leading in the national and betting polls ahead of the debate, a clear win by the former Vice President could have provided the stock market with more certainty around the outcome on November 3. However, with no perceived clear winner to the debate and growing concern about a contested election, U.S. stock futures fell after Trump’s comments about not accepting the results if he feels the election isn’t honest. U.S.  equities were higher early Wednesday, with the stock market taking a wait-and-see approach to the election.

We have cautioned, and continue to expect, bouts of volatility heading into the election and beyond. We believe client portfolios are well positioned to manage this period of volatility with a small overweight to diversifiers designed to help buffer market swings.

While there will be much to watch in the coming weeks, we believe this election provides investors with a call to action—but not overreaction. With the potential for higher taxes under a Biden administration, it is best to act on those things you can plan for, such as revisiting wealth plans and incorporating tax-aware investing strategies that can help to maximize after-tax returns. However, politics can fuel emotions, so it is best not to overreact to election turbulence and instead, stick with your long-term investment plan.

5. Debates are important to voters—but aren’t conclusive.

The American public has always seen the presidential debates as the political equivalent of the Super Bowl. In 2016, a record 84 million people tuned in to the first Clinton-Trump debate on TV, according to Nielsen Media Research, making it the most watched campaign event. In the same year, just 35 million people watched the final night of either the Republican or Democratic conventions.

Certainly, debate performance can help voters make up their minds. According to surveys conducted by Pew Research Center, three out of five voters generally find debates very or somewhat helpful in deciding who to vote for.

That said, the debates are just one piece of the puzzle, and they’re not typically the venue for voters’ “eureka” moments. According to Pew, just 10% of voters surveyed after an election say they came to a final decision during or just after the debates. By contrast, 42% say they had already made up their minds before the national conventions and 22% said they decided during or just after the conventions.


The next debates are as follows:

  • October 7: Vice presidential debate in Salt Lake City at the University of Utah
  • October 15: Second presidential debate in Miami, Florida
  • October 22: Third presidential debate in Nashville, Tennessee, at Belmont University
  • November 3: Election Day

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