Election Betting Update and its Impact on Markets.

Trump’s betting:

Average of all betting markets (black)

The three largest betting markets

Polymarket (blue)

Predictit (orange)

Kalshi (green).

Effectively, they all have the same results and trends.

Are these markets trading at the wrong level (suggesting manipulation)? I would still argue no.

Real Clear Politics aggregates polls using a simple moving average.

For the first time since August 4, Trump leads in NATIONAL polling.

For the first time in the three elections that Trump has been the Republican nominee, he leads the NATIONAL polling (red).

Election modelers aggregate data points, such as polls, money raised, economic statistics, etc., to calculate a candidate’s probability of winning.

Silver Bulletin is probably the best-known member of this group.

Trump (orange) leads over Harris (blue).

Silver is not the only one with an election model.

Below are the probabilities that Trump will win for arguably the three most popular models:

Silver Bulletin (blue)

FiveThirtyEight (green)

Economist Magazine (red).

Betting markets show Trump winning in the low 60s, whereas the modelers have him in the low 50s.

We would argue that betting markets reflect all known information, which the modelers do, and anticipate upcoming information.

Since Trump is in an uptrend in every chart shown above, it is reasonable that the betting markets would be trading with a Trump premium versus the models. They expect his gains to continue.

How does it impact markets?

Arguably, the most significant impact is on the bond market. The higher Trump betting goes, the higher 10-year yields go.

Trump will stimulate growth (cutting taxes and regulation) and potentially create more inflation (tariffs).

The Republican Wins basket of stocks is vastly outperforming the Democrat Wins basket of stocks (explained on the chart).

An obvious election play

And another election play, although this relationship might be "fraying" in recent days.