Look at this insanity above. From a hint at an announcement to an absolute failure of a midterm season - let’s make sense of it…
Welcome to the second instalment of Market Monitor, a monthly blog where I discuss the main events in US politics and the potential changes we’ve seen in betting market odds as a result. Last month, I established the markets I am monitoring, and the early changes that we saw, with Trump’s odds of winning the “Election Winner” market shifting from 3/1 to 10/3 following news of investigations being announced into his financial dealings, DeSantis’ odds surprisingly improving from 10/3 to 7/2 amidst the Martha’s Vineyard migrant-trafficking scandal, and Biden’s odds also improving 11/2 to 5/1 against the backdrop of ever-improving approval ratings.
This was the only movement across the six markets I am tracking from Ladbrokes, and given how far out we still are from the 2024 Presidential Election, it’s not surprising that there was a stability to the odds. However, thanks to the Midterms, the markets have been subjected to an insane amount of volatility. This edition of Market Monitor was originally meant to be published at the end of October, but being so close to the Midterms meant waiting to see what would unfold was too enticing.
2024 Election Winner: The End of Trump?
Heading into the Midterms, former President Trump saw a massive surge in the odds of being the overall election winner when he heavily teased a future announcement and the idea of having to “do it all again”, referring to winning the presidency in 2016. Trump’s odds jumped from 10/3 (23.1%) to 2/1 (33.3%) from the 3rd to the 8th November. With his stock at an all-time high, he was at the forefront of the GOP yet again heading into the midterms. The main test of said stock, however, rested in the performance of the candidates he had endorsed.
Trump’s picks have been responsible for a lot of friction within the GOP, with establishment figures in the party being unhappy with some of his more “out there” picks. This includes TV personality Mehmet Oz (Pennsylvania Senate candidate), “Trump in a dress” Kari Lake (Arizona Governor candidate) and hardcore Trumpist Lauren Boebert (Colorado House candidate).
Trump’s picks seem to have backfired. Oz lost to John Fetterman, a colossal victory for the Democratic party that helps them keep the Senate; Lake is, as of writing, losing to Katie Hobbs 50.7% to 49.3%, and Boebert is on the verge of losing her seat too, with the race against Adam Frisch going down to the wire. Trump’s command of the party is slipping, big time, and we have already seen a wealth of previously Trump-favored media like the New York Post and Fox pushing anti-Trump sentiment - including this blistering statement from the former:
“Trump has also been pilloried by several prominent GOP figures, who argue that the stunning lack of success of the Republican Party in the midterm elections, and Trump-backed candidates in particular, is indicative that a new GOP standard-bearer is needed in 2024.”
Rumors are circling that some in Trump’s inner circle are encouraging him to delay announcements of running (which he seems to be ignoring). As a result, Trump’s odds have begun to crash down to Earth. In the immediate aftermath of the midterms, he has dropped down from 33.3% (2/1) to 25% (3/1).
Ron DeSantis, however, is very much in the ascendancy in the Election Winner market. His odds acted in zero-sum fashion, where Trump’s teasing of an announcement saw DeSantis’ odds drop from 4/1 (22.2%) to 9/2 (18.2%) over the same period that Trump gained - an effect also felt by President Biden who saw his odds drop from 5/1 (16.7%) to 6/1 (14.3%), only to rise back up to 9/2 (18.2%) following his party’s overperformance. Following the midterms, where DeSantis romped to victory in his Florida gubernatorial race, his odds soared to 30.8% (9/4).
In the Republican Nominee market, an identical pattern emerged. Trump’s odds jumped from 6/5 (45.5%) > 4/6 (60%) > 13/10 (43.5%). DeSantis, on the other hand, shifted from 7/4 (36.4%) > 11/4 (26.7%) > 13/10 (43.5%). Trump may still lead, but DeSantis is very much surging.
Democratic Nominee Market: Marijuana Pardons Help Biden
A consistent criticism offered towards the Biden administration, particularly from the more progressive-left side of the Democratic party, is that his forward-thinking policies don’t go far enough. Perhaps this is Biden playing the political game, and imposing new policies that appease the progressive base but do not sufficiently alienate floating voters in the middle of a voting decision. An example of this is student loan forgiveness, with Biden’s announcement of federal relief of up to $10,000 for most who are eligible, and $20,000 for Pell Grant recipients.
Biden’s recent announcement on marijuana pardons is another solid example of this divide. In a series of tweets on October 6, President Biden announced the following approach:
Pardon all federal offences of simple marijuana possession
Call for governors to adopt the same approach on a state level
Change marijuana’s classification, as it is currently on the same level as heroin
The implications that these pardons will have on removing needless blots on countless criminal records is profound. Barriers to jobs and additional opportunities are lifted, and a better chance of economic security is returned. In the odds, Biden saw a dramatic increase following this announcement
Biden’s odds in the Democratic Nominee market rose from 2/1 (33.3%) to 13/8 (38.1%), and have even received a minor boost up to 6/4 (40%) in the wake of the midterms. Harris’ odds lengthened from 4/1 (20%) to 9/2 (18.2%) (with the orange line in the chart marking the date of the announcement). My personal take is that Biden and Harris are, as of right now, the most likely candidates regardless of others making ground like Governor of California Gavin Newsom, and so the two are in a somewhat-zero-sum-game where Biden’s odds shortening are offset by Harris’ weakening. On October 4, just two days before the odds shift, Biden was reported to have told Al Sharpton that he would be running again in 2024, although an official statement of intent has not yet been released.
This shift has not been reflected by a similar change - in the Election Winner market. Biden’s odds have improved following the midterms, but there was no impact on his odds here following his progressive policy announcements. This market is no doubt more stubborn and resistant to change; changes in Election Winner odds are more likely to influence the respective party markets, but not the other way around.
Rest of the Markets Round Up
Winning Party: Republicans are favored to take the White House, running at 4/6 (60%), compared to Democrats, who, in the first movement in this market since I started tracking on the 12th September, have shifted from 5/4 (44.4%) to 13/10 (43.5%) and Independents at 25/1 (3.8%).
Republican Ticket (Nominee + VP): A Trump+DeSantis ticket remains the most probable, shifting up from 9/1 (10%) to 6/1 (14.3%). My personal take is that this partnership won’t ever come to fruition - both have eyes firmly on the White House and DeSantis’ stock is only going to increase while Trump can only really lose ground. Could be wrong. This market has however been suspended by Ladbrokes since the 8th. Will update on the next Market Monitor if it comes back.
Democrat VP Nominee: VP Harris is currently eyed as heavily favored to retain her position, however her odds have worsened, shifting from 6/5 (45.5%) up until November 8th, where they have dropped down to 6/4 (40.0%). Transport Secretary Pete Buttigieg has seen a slow uptick, with his odds shifting from 8/1 (11.1%) to 6/1 (14.3%) on the 8th November as well.
Concluding Thoughts
The odds are likely to shift a lot in the next week or so, with Trump’s announcement supposedly taking place on Tuesday 15th November. An explicit announcement could force DeSantis’ hand, who might wish to strike while the iron is hot, even though he only just won re-election to gubernatorial office in Florida. Is Trump capable of recovering after a disastrous midterms, or is DeSantis DeFuture?