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Betting Odds Collapse: Electoral Stock Exchanges Eliminate Trump
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Donald and Melania Trump tested positive for coronavirus
Donald and Melania Trump have contracted the corona virus. The president and the first lady of the United States are in quarantine. Therefore, the electoral campaign will have to be canceled during the next days.
After the infection of the crown became known, the quotas in the electoral markets much noticed for the president collapsed. The financial markets are also reacting dissatisfied. Because another trend-setting project is now on the brink.
meIn January, the president of the United States was sure that everything would work out. In February, Donald Trump predicted that the coronavirus would disappear “like a miracle.” In March he saw the light at the end of the tunnel. Now, almost exactly a month before the elections, he himself is infected. And then your attitude in the past falls on your feet.
This can be seen in the electoral markets. There, Donald Trump’s quotas plummeted overnight. Therefore, his re-election is increasingly unlikely. Above all, however, there is growing uncertainty about how things will continue in the United States in the coming weeks. And that, in turn, shakes the financial markets.
Trump’s crash in the electoral stock markets began after the duel of speeches with his challenger Joe Biden. Before that, the latter was ahead of Trump with a rate of 54.5 to 45, according to the election observation site RealClearPolitics. That widened to 61.3 to 39.3 on Thursday, so the gap had doubled. Now, however, the odds are already 65 to 31. The difference applies to bets on other candidates, for example, two percent also bet on Vice President Mike Pence; they apparently expect Trump to die and then his vice president and win.
Electoral exchanges are a good barometer of sentiment, as they react much faster than polls. They still need a few hours or days before they can publish new figures based on surveys after the president learned of the infection. Bettors on the exchanges also bet real money, so these are not fun bets.
Source: WORLD infographic
But in addition to electoral markets, financial markets also reacted to the news on Friday morning. The Dax fell 1.4 percent at first, the euro fell, the US dollar and the price of gold rose as investors fled to safe havens.
“Trump’s infection with the corona virus raises too many open questions in a sensitive phase of the election campaign, the answers to which investors are now trying to assess,” says Jochen Stanzl, chief market analyst at CMC Markets. After the already unstable trading days, there is now more uncertainty. “And if there is one thing that the stock exchanges cannot bear, it is uncertainty.”
Milan Cutkovic, a market analyst at brokerage Axi, fears investors will increasingly lose their buying mood in the coming weeks. Because not only has uncertainty about the president’s health and the outcome of the elections increased, the fate of the economic stimulus package that the United States is currently trying to put together is also in the stars.
The House of Representatives yesterday voted 214 to 207 votes for a program worth $ 2.2 trillion. But there the Democrats have a majority. However, in the Senate, where Trump’s Republicans dominate, this package is unlikely to pass. Because they want to pay a maximum unemployment benefits of $ 400 per week, for example, instead of the $ 600 now planned. In general, they want to spend about $ 600 billion less.
Ultimately, however, it is up to this stimulus package whether and how quickly the ailing US economy can recover, and this in turn has a direct impact on business sales and earnings, and therefore on business. price of its shares.
However, the mood can change again very quickly, also when it comes to Donald Trump’s chances. Because in the last elections, the betting exchanges were very bad. One month before the vote, Hillary Clinton had an even bigger lead than Joe Biden now, at a rate of 78-22. On Election Day, the ratio was even 88-13, as we know, things turned out badly. very different.
What is different this time is that a large section of the population no longer mistakenly believes that Trump has no chance. The general mood against which bets are placed is different from 2016.
But if Trump gets mildly ill and recovers quickly, he could gain more public approval, said Yako Sera, a market strategist at Sumitomo Mitsui Trust Bank in Tokyo. That was the case, for example, of Brazilian President Jair Bolsonaro. He was able to distinguish himself as a strong man by overcoming the infection. Trump could also achieve something similar. “However, the disease hinders his options in the election campaign and the time leading up to the elections is running out,” says Sera.
