Bush could win by a narrow margin, but there's hope for Kerry if the non-economic factors come into play as evidenced by the polls.
What impact will it have on the bond market?
Since Kerry is more intent on battling the deficit and reinstating pay-as-you-go kind of rules, he would be viewed as a better candidate for deficit busting. That would be a plus for bonds and negative for stocks. But we don't see many spending cuts, and for that reason we could see a much bigger deficit.
Bush has been emphatic about keeping dividend and tax cuts, which would be a plus to the equity market. However, the equity markets also react to growth and I think Kerry would be a plus for financial markets in general.