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STRATEGY: The most distorted position arguably cash
Odds makers raised the probability of Biden win yesterday--> market rally due to Biden gain?
Post the first 2020 Presidential debate, odds makers raised the probability of a Biden win. As shown below, to bet on a Biden win, one needs to pay $162 to win $100. This was $104 to win $100 on 9/1. As you can see below, the odds rose for Biden since the debate.
- Yesterday, markets are responding to two effects: post-debate and progress on stimulus plan (CARES V)
- Does rally yesterday mean equity markets prefer a Biden win?
That is not entirely clear, because of the clear impact of progress on a fiscal stimulus package.
But the acrimony of the first debate was enough to prompt the election committee to change the debate format and structure to ensure a "more orderly discussion" takes place. The only winner of last night's debate is the enemies of the US.