The US presidential elections enter their final stretch. There are already more than 60 million people who have left their votes at the polls, which is almost a third of those expected in total, and the candidates are fighting to attract undecided voters until the last moment.
With the polls incredibly tied, even within the margin of error of the polls, there are other indicators that can shed some light on who may be the favorite candidate to become the next leader of the United States. And no better indicator than money. There are several ways that allow us to measure the direction in which dollars move: bets, predictive systems and, above all, markets.
Sectors directly affected by the electoral proposals of the two candidates are a good alternative indicator, but there are other assets, such as the dollar or the US bond, that are also now useful for making pools. We analyze the market indicators that can be used at this time to anticipate the results of the elections.
Markets
The first thing to highlight is that market indicators are a signal ‘contaminated’ by other elements. Unlike a direct survey on voting, assets such as bonds, the dollar or oil companies are affected by electoral noise, but also by other factors, such as macroeconomics, geopolitics or, directly, by the movements that investors make in their portfolios derived from their investment decisions.
Therefore, the fact that oil companies have fallen a lot on the stock market in recent days may have more to do with current oil prices than with investors’ expectations that Kamala Harris will win the elections. However, all the indicators, together, can help give an idea of what the markets are expecting ahead of next Tuesday’s elections.
Two of the most important assets in international markets can serve as an indicator of investors’ expectations for the elections, due to the relationship they have with Donald Trump’s trade policies. The Republican candidate has proposed continuing his trade crusade against China, but also on other fronts, such as the euro zone, and his measures in this regard, together with a more restricted immigration policy, have a direct consequence: inflation.
If Trump were to win, and approve the tariffs he has proposed, this will be a source of inflationary pressure. Experts and analysts such as Nannette Hechler-Fayd’Herbe, investment director at Lombard Odier, explained it in a recent interview with elEconomista.es: “Trump proposes higher tariffs, in general, and this can have an impact, even if it is temporary, in price levels and inflation. We must think about the US labor market: if immigration slows down and there is a lower supply of workers, the labor market may be tighter and this may generate wage pressure, which may also occur. affect service inflation,” explains Hechler-Fayd’Herbe.
The inflationary impact of his policies would prevent the Federal Reserve from lowering rates as much as it has been priced, and a possible victory for Trump could have had a bearing on the movements seen in the dollar and the bond during the month of October. The two assets have appreciated aggressively in recent weeks, which would point to an increase in expectations that Trump will win the election next week.
Trump Media Stock
Donald Trump’s media conglomerate, Trump Media, is a publicly traded stock in the United States, and its variations in recent weeks have led many analysts to consider it an improvement in Trump’s expectations in the elections. The company’s shares have appreciated 187% in the month of Octobera rally very fast that seems to hide good news for the tycoon.
One of the sectors that would benefit the most from a Trump victory is the banking sector. The presidential candidate has been very critical in recent years of the excess regulation in the North American giant, and especially with the Dodd-Frank law, a regulation that was implemented after the Great Financial Crisis to try to reduce the risks that generates little regulated banking business.
Although there are more moderate voices that have been critical of the regulation, considering it excessive, if Trump finally carried out strong deregulation in that sense, that would have a direct impact on the profitability of the banks. Thus, the increases that occurred in October in the banking sector of the S&P 500, of 7.3%, point to optimism on the part of the industry in the face of the elections. Of course, a good part of this rise may also have to do with the expectation of seeing reference interest rates higher than expected in the coming months, and dilutes the impact of the elections.
Pharmaceutical companies want Trump and health services want Harris
The health sector also has a role as a compass in the face of the election results, but we must distinguish between two types of companies: pharmaceutical companies, and companies that offer health services. Pharmaceutical companies, which have not had a good month on the stock market compared to the average, are being threatened by the proposals of Kamala Harris, who wants to try to reduce the price of medicines and tighten regulation of the sector. The poor behavior of companies in the sector in recent days may be a positive sign for Democrats.
On the contrary, the health services sector can have a positive boost if the Democrats win, who intend to increase the universalization of health care through Medicare, the health insurance program for those over 65 and young people. The bad month that companies in the sector in the S&P 500 have also suffered can be considered a positive sign for Republicans.
Betting on the winner
Until now, political betting was prohibited in the US. Even sports betting was illegal for many decades, except in some specific areas such as Las Vegas or the casinos in New Jersey. But a decade ago, the Supreme Court authorized betting nationwide, and this year the Washington Courts have given the green light to political betting, which has skyrocketed.
In this field, Trump’s victory is around 63%, according to data from Betfair, and in recent weeks the turnaround has been quite clear, despite the fact that Harris is making a slight comeback in the last few hours in the key states she needs to win. .
So far, on Betfair alone, there are already around 200 million euros bet, a figure that will increase in the coming days, as the bets tend to intensify as the time of the vote approaches.
This platform remembers that its bettors have guessed the results of 22 of the 24 most important elections in the world since 2020. Only two were wrong: the general elections in Spain on June 23 and the presidential elections in Turkey last year. And looking at their track record, the bookmakers have one thing in common: they tend to give Trump a lot more options than the polls say.
Prediction markets
Then there are prediction markets, a version of the betting houses that existed before they were legalized, in which users bet that one thing or another will happen, but on more complex matters of whether one will win. or another. Some examples of what can be found on these platforms are if there will be a US war against Iran, if OpenAI is going to announce ChatGPT-5, if early elections will be called in Spain and who will be the PP candidate. They require a little more knowledge than simple bets.
And in this case, the platforms with more tradition and more history of success are halfway, giving Trump as a favorite, but with narrower margins: 56-44 in Predictit or 53-47 in Metaculus. Be careful, they are victory percentages, not vote percentages. This would be more or less like a basketball game that goes 70-68 with possession for the loser, with a couple of minutes left. One of the two is ahead. Yes, but I wouldn’t bet my house that the one who is winning at that moment will be the one who wins when the horn sounds.
A special case is that of Polymarket, the fashion market this year. It is a website that works with cryptocurrencies, which technically does not allow Americans themselves to bet, and in which crazy amounts of money are moving. There, Trump leads 67-33, a much clearer margin. But several things come together: that cryptocurrency users tend towards the Republican side; that Elon Musk, Trump’s potential minister, is advertising this website to his followers; and that very strange things have happened there: as confirmed by the website itself to the CNBCa French bettor put $28 million on a Trump victory.
The reality is that, no matter which indicator we look at, the equality between both candidates is maximum, and it is difficult to predict what will happen next Tuesday. Whatever the result, it will not be a surprise.
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