Wall Street No Longer Looking Confident of a Trump Victory

Photo: Michael M. Santiago/Getty Images

With more than 24 hours to go before the final ballots are counted on Election Day, Wall Street is already betting on its success.

In the final days of this election – which has been rigged for the first time in a century, through the lens of high-stakes betting markets – the financial industry is acting like investors risk-free and they are not like they are in business. on the floor of the Trump Taj Mahal. On Monday, the chances of Donald Trump and Kamala Harris at all betting sites had changed, according to several strong polls and the results of the candidates favoring the Democrats. Therefore, some of the so-called Trump trades ended up betting on private prisons, bitcoin, and US stocks going sideways.

There is no single reason why the markets are already anxious and indecisive about the election on Monday. One of them, of course, is the overall betting process that will protect investors from Tuesday’s outcome, whatever it may be. But for traders and hedge-fund managers, elections are just one event of many to worry about. “Most of us invest for years and decades, not days. We need to watch the economy carefully, not react to the headlines,” Callie Cox, chief market strategist at Ritholtz Wealth Management, wrote in a letter investigation Monday.

There are several Trump businesses that have gone down in the last week or so. GEO Group, the private prison company that boomed after Trump’s 2016 victory, fell 15 percent. The Dow Jones fell more than 200 points on Monday. Bitcoin is over $5,000 from its recent peak of $73,000. Even US Treasury bonds, which have been shorted heavily on expectations of Trump’s economic inflation, have advanced little since last week’s sell-off. Trump Media & Technology Group, the former president’s meme-stock company, has lost more than a third of its value. The betting odds across the board give a slight advantage to Trump – about 55 to 45, as of Monday afternoon.

It was only a few days ago that the money set seemed convinced that Donald Trump would run away from the election, putting the second hand against the tax, pro-tariff, the total economy of Trump, this time aided by the aforementioned Republican- dominated Congress and the Supreme Court. What happened? On the other hand, it seems that political forecasting reflects less faith in who will be in the White House than a short-term strategy to make money. faith that Trump will win.

Consider the perspective of Goldman Sachs. For most of October, almost everything – stocks, gold, oil, bitcoin – was in history. However, on Friday, the bank was telling customers that it might be time to be careful. “Our biggest bias is that the post-election measures are more likely to produce an eventual fade (rather than a chase),” the bank’s economists wrote in a note. of bonds and interest rates. Translation: It was fun, but now it’s time to sell.

For investors, there is a full calendar to consider. On Thursday, the Federal Reserve is likely to cut interest rates again, giving an indication of how healthy the economy is. Bond investors are probably most worried about the debt ceiling that could cause a new wave of gridlock in Washington. “Of course, policy changes can lead to different outcomes, and elections are indicators of policy change,” Cox said in his letter. But to be honest, the Oval Office doesn’t have as much power over the economy as individuals, businesses and the Fed.