Trump has so far outperformed in this election. The pundits wrote him off early on. The whole might of the Republican Party got behind an alternative candidate to try to prevent him getting the nomination.
Many professional Republican politicians were reluctant to support him, and some refused. They had to watch as he narrowed the polls. He keeps telling people he can win, and they will win if he wins. A lot seem to believe him.
The Clinton campaign has condemned him for his views on migrants and Mexicans, for his attitude to women, for his lack of political experience, and for his character and decision making.
Clinton claimed his supporters were “deplorables” but had to downplay this. Attacking the voters you need to attract has its downsides as an election tactic. Despite all this, some polls now show him narrowly ahead.
It is also quite possible that some people who will vote for Trump will not tell their friends and pollsters they are doing so. Voting Trump is not the “done” thing in certain social circles.
Why is he doing so well despite the criticisms and the horror of much of the establishment? His mantra is optimistic and upbeat when he speaks of making America great again. He offers generous tax cuts for all, and seeks to provide hope of higher real incomes and living standards.
His attacks on the Washington elite, on world trade deals that help multinationals, and on large numbers of migrants depressing wages, are designed to attract support from large swathes of Middle America who feel they work hard but are not properly rewarded or appreciated.
He has dominated the battle of the slogans. People remember “Making America great again”, and remember his constant attack on his opponent as “Crooked Hillary”. The Clinton refrains of “I’m for her” and “Stronger together” struggle to compete.
It’s as if Clinton has difficulty in articulating herself what she wants to do with the power of the office. Trump is definitely the Change candidate, she is the steady as we go candidate.
In such elections, the status quo or establishment candidate wins if at least one of two conditions are met. If people are broadly happy with the status quo they will vote to keep it. If they fear the alternative and think that dangerous they will vote to stay as they are.
Trump believes there is a majority that does not think the status quo is good enough, that it does not help them. Clinton fears that may be true, so she works hard to stop normally Democrat voting groups from defecting to an unlikely candidate.
Trump makes it more difficult for her by pursuing Democrat policies of bigger spending and bigger deficits, and he adds in tax cuts for good measure.
A Trump win is now possible. It is likely to produce a sharp negative market reaction on the news. Forecasters will probably adjust their numbers downwards, arguing there will be a Trump impact on confidence. In the longer term if Trump manages to do even half what he wants economically it means more growth.
He would offer a substantial fiscal stimulus by both spending more and cutting tax rates. Whilst he argues that the lower tax rates will bring in more revenue from more activity, that takes time to come through. He wishes to offer an incentive to US large companies to bring back substantial cash from overseas, which could help with revenue on a one-off basis and provide more company cash to invest. It would be better for shares than for bonds.