Welcome to Thoughts on the Market. I'm Michael Zezes, head of Public Policy Research and Municipal Strategy for Morgan Stanley.

Along with my colleagues bringing you a variety of perspectives, I'll be talking about the intersection between U.S.

public policy and financial markets. It's Wednesday, July 8th at 11 a.m. in New York.

As we move through the 2020 election campaign, a trend is emerging, a sizable lead in the polls for Joe Biden and an

emerging lead for Democrats in key Senate battleground states.

We get why investors might be skeptical these polling leads can hold up.

After all, we're still months away from the election, and the first six months of this year have already seen many events that could be considered political game changers, impeachment, a pandemic, and social unrest among them.

Still, we don't think it's too early for investors to take seriously the idea of a blue wave

where Democrats take back the White House and Senate.

Consider some of the underlying elements of recent voter surveys.

A recent Pew survey showed that since March,

17% of voters previously committed to Donald Trump now intend to vote for Joe Biden.

One trade of this voter cohort, they tend to come from areas hardest hit by COVID-19.

That's not surprising, as this survey and many others show that Biden is net more trusted on the issue of

dealing with the COVID crisis and unifying the country.

More evidence comes from the polling firm Morning Consul,

which finds voters are more motivated by dealing with COVID than the economy,

even among households where someone has recently lost their job.

So it's a reasonable take that the ongoing rise of COVID-19 may keep the

president at a polling deficit even as the economy pursues a V-shaped recovery.

So what does it mean for investors? Pay attention and look to turn market mistakes into opportunities.

Markets may be dismissing polls for the moment,

...