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Goldman Sachs: Don't expect Brexit-type surprise in presidential race

Goldman Sachs putting trust in the polls

With their candidate lagging in most of the major polls, Donald Trump's supporters are hoping the election holds a surprise akin to June's Brexit vote.

Goldman Sachs, though, believes the chances of a Nov. 8 surprise in the U.S. are remote.

The two races differ in several key ways, Goldman economist Alec Phillips said, diminishing the possibility of a repeat where polling incorrectly suggested that Britons would vote to stay in the European Union.

"We think the situation is different for two reasons. First, and most importantly, while both situations represented an opportunity for voters to endorse a change in the status quo, voters in the U.K. were asked to decide on an idea whereas in the U.S. they are being asked to decide on a person," Phillips said in a note to clients Wednesday. "Second, the polls are simply not as close in the current presidential contest as they were ahead of the U.K. referendum."

On the first point, Phillips obviously is correct. The second, though, isn't as clear.

True, some polls have showed a yawning gap between the two candidates. The latest NBC News/Wall Street Journal poll put the Hillary Clinton lead at 11 points, the last ABC tracking poll had the Democrat ahead by 8 and CNN has the advantage at 6 points.

However, the Real Clear Politics average of all major polls gives Clinton just a 4.4-point edge, and the Los Angeles Times' tracker even sees Trump with a 1-point lead.

By comparison, the final London Telegraph poll heading into the June 23 vote had the "remain" vote with a comfortable 4-point lead. Betting odds in the U.K. had given "remain" an 88 percent chance of prevailing, against the "leave" victory of 4 points.

In his analysis, Phillips noted that The Economist magazine published an average of polls that showed the referendum tied, with a large percentage of undecided voters. He also said polls showing Trump ahead, like the LA Times and Rasmussen, use methodology different from many of the other mainstream outlets (though he concedes that polls showing Clinton with outsize leads also could be outliers).

Phillips mostly dismisses the importance of third-party voters, whom he said often break toward a major-party candidate as Election Day approaches.

"In theory, if undecided voters broke entirely in favor of Mr. Trump on Election Day, this could change the election outcome," he wrote. "However, the views of undecided and third-party voters suggest that they are more likely to vote for Sec. Clinton than Mr. Trump, if they vote at all."

Specifically, he cites a Washington Post poll showing that 46 percent of voters not supporting either Clinton or Trump had a "strongly unfavorable" view of Clinton, against 71 percent for Trump.

Finally, he believes Trump won't be aided significantly by stronger-than-expected turnout, while early voting trends don't appear to favor the Republican either.

However, Phillips does not address recent polls showing Trump with a solid chance of winning critical swing states Florida and Ohio, or narrowing gaps in Pennsylvania and North Carolina.

"Overall, while one cannot rule out the possibility of an electoral surprise, most of the theories as to how this might occur are not borne out by the recently available data," Phillips said. "The declining share of undecided and third-party voters is shrinking, leaving fewer voters left to persuade, and while a shift in turnout could upend the models most pollsters use, there are no signs thus far in early voting that such a shift is occurring and, if anything, recent data suggest a slight Democratic turnout advantage."

Wall Street is heavily invested in a Clinton victory.

Securities and investment firms have poured nearly $65 million into her campaign coffers, according to the Center for Responsive Politics. Goldman Sachs employees have donated $284,816 to Clinton and just $3,641 to Trump, who has received $716,407 from Wall Street.