We're just 15 days away from the 2020 Election and, as every week, our analyst Political Joe takes a look at the latest US presidential race moves on the betting markets. Don't forget to subscribe so you can stay updated to the latest experts insights every week.
Polls vs Betting Markets
When it comes to US Election 2020 the polls are indicating one thing with the betting markets very much in disagreement. But which should we believe? While we won’t know for sure until the first week in November the sizeable disconnect between the two is very much back in play over recent days.
In the days post President Trump getting back on the campaign trail the betting markets quickly abandoned its goodwill towards him. This saw Biden’s Betfair Exchange price bottom out at a new low of 2/5 (71% chance), a lot closer to what the polls have indicated it should have been for weeks. Fast forward 10 days of somewhat unexplained market volatility and Biden was all the way back out to 3/5 (63%) for a time on Tuesday Oct 20th. So, in a week of Town Halls, true to brand President Trump rallies and relatively consistent polling numbers what is driving this fluctuation?
The two Town Halls, which took the place of the scheduled 2nd debate, weren’t exactly compelling TV viewing. As a matter of fact, even if you wanted to watch both, you couldn’t. Scheduled at the same time on different networks, those who did dip into both saw what they might expect. A brash loud President on one side compared to a softly spoken man of the people on the other. Nothing that would change anybody’s mind about either candidate. Tending more to a cheer squad event for their respective bases and not something that might move the betting markets almost 10%.
A similar commentary can be applied to the week of Trump rallies. These are most definitely not like a box of chocolates as you know exactly what you’re going to get! At one point during a recent rally in Georgia, President Trump managed to get the crowd chanting “Lock Him Up”; now where have we seen and heard this before? This appears to be the ‘if it’s not broken, don’t fix it’ approach to the 2020 campaign, and ultimately plays to his existing base rather than expanding it. Sure, these rallies energise the crowd in attendance, and more importantly President Trump himself, but that’s about it.
The only other story of significance during this period has been a New York Post article regarding Hunter Biden (Joe Biden’s son). Coming late in the campaign it alleged that Joe Biden had leveraged his position as Vice-President to the benefit of his son. Since being published, the credibility of the article has been called into question. With some of the publications own staff members citing concerns about the reliability of sources and its timing. This is a watch this space story however, as if there is another debate this week as scheduled, it’s sure to be something the Trump campaign would like to bring in to play if permitted; irrespective of the legitimacy.
Supply and Demand
All of the above bring us to the most likely explanation for this market volatility, demand. Betting markets are awash with bettors who recall nothing other than a decent sized pay out in 2016. These are what might be considered mass market bettors – they have been watching on from the side lines to date, but with the election getting closer are starting to invest. They see Trump as an underdog who has been here before and tasted success. They hear the same type of rhetoric at the latest burst of campaign rallies that they have heard 4 years ago. All this points to the 3/2 (40%) on offer at Paddy Power & Betfair as value for this cohort.
This Political Joe knows that the betting markets are very much a supply and demand business. If the demand continues, no matter what the polls say, expect Trump to shorten a little further if anything in these closing weeks.