The global markets have spoken. And so have the odds-makers.
Moments after Tuesday night’s bruising Trump-Biden presidential debate, the world weighed in on who won and who lost. Judging by the closely watched betting markets, score one for the blue team.
“Biden seems to have come ahead in last night’s… somewhat-chaotic debate against Trump,” Holger Schmieding, chief economist at Berenberg Bank, wrote in a note to investors this morning. “The probability of a Biden win has risen to 58.4% versus 55.3% just ahead of the debate, up from 51.0% four weeks ago. The probability of a Trump win has fallen to 40.0% from 42.5% before the debate and 46.2% four weeks ago.”
Berenberg’s Schmieding included in the report the following chart showing the latest odds:
Throughout the morning, the gap had widened further. As of 7 a.m. ET on Wednesday, Biden had taken a 20-point advantage (59.3% to 39%) in win probability for the White House, according to Election Betting Odds.
Election Betting Odds and sites like it “base their projections on money laid down by regular people from around the world on a host of betting sites rather than on opinion polls or on the views of pundits or insiders,” Fortune wrote last year. With individual opinion polls coming under increasing scrutiny, Wall Street firms now routinely cite the betting odds data in reports that spell out the Election Day risk to investors.
Tuesday’s debate was marred by a barrage of insults, name-calling and heckling. And President Trump’s repeated attacks on the mail-in voting process raised concerns among global investors that America could be facing a contested election, UBS chief economist Paul Donovan wrote in an investor note on Wednesday.
That cloud hung over global markets on Wednesday, with U.S. futures solidly in the red. That uncertainty is likely to linger, Wall Street pundits say.
“International investors have been prepared to entertain some extreme views on this topic (just as they entertained extreme views on the future of the Euro area in the past),” Donovan wrote. “Given the importance of international investors to US markets, this may add volatility around the election.”
In such a scenario, nobody wins.
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