• With less than a month before the US election, Biden has made gains on Trump in prediction markets. While Trump returning to the White House from hospital has seen that gain moderate – on balance Biden has seen his odds of winning the Presidency increase since Trump got diagnosed with COVID-19 (Chart 1)
• Therefore unlike the 2016 election, Trump is losing from events in the run-up to the election. Recall, that Clinton was hurt by the initial FBI investigation into her emails and then re-opening of the investigation towards the end of October 2016.
• The other notable change has been a surge in the odds of the Senate flipping to the Democrats (Chart 2). Therefore, the base case for markets is now for a Democrat clean sweep.
• While state-wide polling is not fully up-to-date, we find that in the battleground states, Biden has seen gains in Florida, Michigan, and Nevada, while he has slipped in Arizona and Ohio (though still leads).
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- With less than a month before the US election, Biden has made gains on Trump in prediction markets. While Trump returning to the White House from hospital has seen that gain moderate – on balance Biden has seen his odds of winning the Presidency increase since Trump got diagnosed with COVID-19 (Chart 1)
- Therefore unlike the 2016 election, Trump is losing from events in the run-up to the election. Recall, that Clinton was hurt by the initial FBI investigation into her emails and then re-opening of the investigation towards the end of October 2016.
- The other notable change has been a surge in the odds of the Senate flipping to the Democrats (Chart 2). Therefore, the base case for markets is now for a Democrat clean sweep.
- While state-wide polling is not fully up-to-date, we find that in the battleground states, Biden has seen gains in Florida, Michigan, and Nevada, while he has slipped in Arizona and Ohio (though still leads).
- Equity markets initially sold off on the news of Trump’s illness, but have since rallied. There appears to be a growing consensus that Biden may be positive for stocks on his public spending plans (and delaying his tax hikes).
Bilal Hafeez is the CEO and Editor of Macro Hive. He spent over twenty years doing research at big banks – JPMorgan, Deutsche Bank, and Nomura, where he had various “Global Head” roles and did FX, rates and cross-markets research.
(The commentary contained in the above article does not constitute an offer or a solicitation, or a recommendation to implement or liquidate an investment or to carry out any other transaction. It should not be used as a basis for any investment decision or other decision. Any investment decision should be based on appropriate professional advice specific to your needs.)