The consensus Wall Street view is that President Obama will be reelected today. He is certainly the favorite according to betting markets and the poll aggregators. But Keefe, Bruyette & Woods takes the other side of the trade:
The national polls in the presidential election show a statistical tie while the state polls are less consistent, which makes predicting the outcome difficult, if not perilous. For the past week or so, we have been seeing some momentum toward President Obama in the wake of Hurricane Sandy and have viewed him as the slight favorite. But based on some past polling performances and our view of a fluid election, we expect Mitt Romney will be elected President.
We predict that Gov. Romney will win the Electoral College vote 277-261 (270 votes needed to win). In the battleground states, we expect that Mr. Romney will win FL, NC, VA, CO, and PA. We expect Mr. Obama will win NV, IA, WI, NH and OH. This would be the first election won by a Republican without carrying OH.
Why PA? We think lower turnout in the Philadelphia area for Mr. Obama than in 2008 coupled with a strong showing for Mr. Romney in the western part of the state will make the difference. Also, PA does not have early voting, so the recent shift in momentum there could have a bigger impact than in states like OH that do have early voting.
What about the polls? With regard to the national polls in 2008, the final realclearpolitics.com (RCP) average had Mr. Obama up by 7.6 points and he won by 7.3 points. In 2004, the final RCP poll showed resident Bush up by 1.5 points and he won by 2.4 points so there is a slight tendency to underestimate Republican strength.