Biden’s lead in the betting markets was down to 1.9 points
President Trump’s chances of securing a second term are surging in the betting markets and investors are unprepared, according to JPMorgan Chase & Co.
An average of betting odds compiled by RealClear Politics showed former Vice President Joe Biden’s lead shrank to 1.9 points on Sunday, down from a high of 24.6 points on Aug. 1.
“Certainly a lot can happen in the next ~60 days to change the odds, but we currently believe that momentum in favor of Trump will continue, while most investors are still positioned for a Biden win,” wrote Marko Kolanovic, quantitative strategist at JPMorgan.
He points to two factors — the violent protests that have sprung up in cities across America and a bias in the polls — as reasons why Biden’s lead has narrowed.
Kolanovic’s team looked at the academic work of Omar Wasow, who found that whether protests were deemed peaceful or violent had a major impact on the outcome of U.S. election results between 1960 and 1972. He said public opinion was swayed by how the media covered and framed the demonstrations.
Protests that were viewed as peaceful helped boost Democratic candidates by 2–3 percentage points while those believed to be violent helped Republicans by 2–8 percentage points, meaning there will be a 5–10 point shift in the polls if the perception of the protests flips from peaceful to violent.
Former President Richard Nixon, who ran on a campaign of law and order, won the 1968 election as a result of the violence, Wasow’s simulation found. Similarly, Trump has made law and order a cornerstone of his campaign.
Source: Jonathan Garber | FOX Business
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