Macroscope | Harris? Trump? Whoever wins, US will be a mess after Election Day
The messier the outcome and the more protracted the dispute over who won, the bigger the threat to the US economy and global markets
A month ago, Harris had a two-point lead over Trump in RealClearPolitics’ average of national opinion polls. The two candidates were also neck and neck in the crucial swing states. However, in prediction markets, where punters bet on the outcomes of particular events, Harris was the favourite to win the election, with spread betting site PredictIt putting the odds of a Harris victory at 57 per cent.
Fast forward to today and the two candidates are in a virtual tie in the swing states. In betting markets, by contrast, the chances of a Trump victory have risen sharply. RealClearPolitics’ average of the odds on betting sites show that Trump’s chances have increased from 46 per cent a month ago to 63 per cent.
BlackRock CEO Larry Fink said earlier this week that the election “really doesn’t matter” as far as markets are concerned. While this is too simplistic, it makes little sense to speculate over who will win an election that is a toss-up. Although investors are often criticised for ignoring or downplaying political risk, insouciance might actually be the right approach this time.