'Trump Trades' Are Awakening, So Are Trump's Winning Chances?

Trump Media Group's stock soars, the US dollar index continues to rise, Bitcoin rebounds sharply, and US Treasuries have been under pressure for several weeks - all these could signal that the tone of some market logic is changing.

After the Federal Reserve's rate cut in September, the main logic of recession trade and rate cut trade in the US market is continuously cooling down, and another vein that has been silent for months - the Trump trade, seems to be awakening again, with less than three weeks before the US election on November 5th...

In fact, although the current polls from US polling agencies show that the competition between Republican presidential candidate Trump and Democratic presidential candidate Harris is still quite fierce - directly related to the interests of the players in the betting market, the balance of victory is clearly tilting towards Trump.

According to the average value of the betting market provided by the website RealClearPolitics, the probability of Republican presidential nominee Trump winning the presidential seat this year has climbed to the highest level since the end of July and is also approaching the high position when the Democratic Party changed people (Harris replaced Biden in the campaign)...

As of Wednesday evening, Trump's probability of winning has reached as high as 57.7%, the highest level since July 22nd, far ahead of the Democratic competitor Harris's 41.3%.

Before October 5th, even in terms of betting odds, Harris was still ahead of Trump.

In this regard, many industry insiders attribute the latest reversal of the election situation to Harris's poor performance in an interview with CBS's top political program 60 Minutes on October 7th. Although Harris responded to the controversial and vague political stance on immigration policy during the interview, the answer of building consensus obviously did not satisfy Americans, especially Democrats. After the program was broadcast, Harris's poll support rate plummeted.

Of course, some analysts are also questioning the reliability of the latest trends in the betting market.

Tobin Marcus, head of the US policy and political department at Wolfe Research, said in a report released on Wednesday that they believe the change in atmosphere has exceeded the actual changes in the campaign situation to some extent - the public's poll numbers and poll-based models have remained stable.

Marcus's team is more inclined to poll models rather than the views of betting bettors.

As of Wednesday, the poll models of FiveThirtyEight and The Economist magazine still show that Harris is slightly ahead in swing states. Although RealClearPolitics's average value statistics for bets on 7 key swing states show that Trump has a slight advantage in 6 states, the average values of FiveThirtyEight and well-known election statistics expert Nate Silver show that Harris is leading in 4 of these 7 states.

Dave Lutz, general manager of Jones Trading, is also cautious about the signals sent by the betting market. He pointed out that on Wednesday morning, the data from the encrypted prediction market Polymarket showed that Trump's support rate was 60% and Harris's was 40%, but this may be distorted.

Looking at the situation in recent years, the betting market's prediction for the 2022 midterm elections was wrong. Some industry insiders said that betting bettors may also be influenced by unreliable polls, and gamblers focusing on politics are often more right-leaning and more male.

However, it is undeniable that a series of Trump trades in the financial market have also performed well recently.

Among them, Trump Media's stock price has risen by 94.5% so far this month, while the Invesco Solar ETF (TAN) and iShares Clean Energy ETF (ICLN), which are generally considered Harris trades, have fallen by 13% and 8% respectively this month