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Financial markets are betting on a Trump victory

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THE FINAL election polls have been published, and in-person voting has yet to conclude. It is an anxious period, with little new information to parse about who might emerge victorious as America’s next president. But that is not stopping investors from placing, and adjusting, their bets. From prediction markets to bonds, they have more ways than ever to register their views about the likely outcome of the election. Most of their money is on Donald Trump, though his perceived lead over Kamala Harris has narrowed in the past few days.

The easiest place to get a read on the thinking of punters is in election-betting markets. The three that get the most attention are Polymarket, Kalshi and PredictIt. Polymarket, a cryptocurrency-based platform that bills itself as the world’s biggest prediction market, gives Mr Trump a roughly 60% chance of winning the election, as of Monday afternoon in America. That is down from 67% last week, a shift that came after a few late polls—notably, the surprising Selzer poll in Iowa—were more positive for Ms Harris. But Polymarket has plenty of critics, with some arguing that its pricing is easily manipulated.

By contrast, PredictIt, the oldest of the three online betting markets, founded exactly a decade ago, has Ms Harris ahead by the slimmest of margins. But it is also the most limited of the platforms, by design, with strict caps on the number of bettors and the size of their bets. Kalshi, a regulated exchange, comes just about down the middle. It currently sees a 56% probability of victory for Mr Trump, down from 65% last week. In the immediate aftermath of the Selzer poll, Kalshi in fact briefly showed that Ms Harris was the favourite before shifting back in Mr Trump’s direction.

It may seem easy to dismiss these various platforms as silly betting arenas for punters, dominated by young men who spend many of their waking hours online. It is striking, however, that their pricing has closely mirrored “real money” in more established markets. To get a sense of how equity investors are positioned for the election, analysts at Piper Sandler, an investment bank, created two separate portfolios of stocks whose fortunes may rise or fall depending on the presidential victor. Their Trump portfolio features oil companies and weapons manufacturers, plus shorts on firms such as Apple that would be hurt by a trade war with China. Their Harris portfolio is heavy on producers of renewable energy and electric vehicles, while betting against financial firms and drug makers that may face more rules under Democrats.

The performance of the Piper Sandler portfolios lines up almost perfectly with the Polymarket odds. In October, as the betting markets turned against Ms Harris, the Trump portfolio gained about 3% and the Harris portfolio fell by 7%. But over the past week, that gap has closed. For instance, Geo Group, a prison operator in the Trump portfolio, has come under selling pressure, while First Solar, a solar-panel manufacturer in the Harris portfolio, has climbed higher. Citrini, a research firm, has yielded similar results with its Trump-aligned basket of stocks. It soared in July after Mr Trump survived an assassination attempt at a rally in Pennsylvania, tumbled when Ms Harris entered the race and recovered as she seemed to lose momentum. But on Monday, the first trading day after the Iowa poll, Citrini’s Trump basket was down by about 1.4% by the middle of the day.

Election predictions have also had an impact on much bigger, more diffuse markets. Yields on Treasuries and the dollar’s value have climbed over the past six weeks, in part because investors have been girding themselves for a Trump presidency. Their thinking is that his policies, including heftier federal deficits and higher tariffs, are likely to drive up both growth and inflation. Such a backdrop would, in theory, support the dollar and weigh on bond prices, leading to an upward drift in yields. But Monday brought a partial reversal of these trends, with small declines in both yields and the dollar—reflections of Ms Harris’s improved standing in the polls.

What to make of all this trading? One conclusion is that investors are a highly uncertain bunch. Polls have been neck and neck almost the entire race, even as the pricing of election-related trades has swung up and down.

Cutting through that volatility, a second conclusion is that investors have, fairly consistently, been more confident in Mr Trump’s chances than the polls themselves. The Economist’s model, based on polls and fundamental factors, rates the election as a true toss-up. Financial markets—from small-time punters on betting exchanges to the giant institutions that determine the prices of bonds—are closer to 55% in favour of Mr Trump. That is a coin flip but one clearly weighted against Ms Harris.

Economics

Jobs report March 2025:

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Job growth was stronger than expected in March, providing at least temporary reassurance that the labor market is stable, the Labor Department reported Friday.

Nonfarm payrolls increased 228,000 for the month, up from the revised 117,000 in February and better than the Dow Jones estimate for 140,000, according to the Bureau of Labor Statistics.

However, the unemployment rate moved up to 4.2%, higher than the 4.1% forecast as the labor force participation rate also increased.

Though the headline number beat estimates, the report comes against a highly uncertain backdrop after President Donald Trump’s tariff announcement this week that has intensified fears of a global trade war that could damage economic growth.

Stocks reacted little to the report, with futures tied to the Dow Jones Industrial Average off their lows still down by more than 900 points while Treasury yields held sharply negative.

“Today’s better than expected jobs report will help ease fears of an immediate softening in the US labor market,” said Lindsay Rosner, head of multi-sector fixed income investing at Goldman Sachs Asset Management. “However, this number has become a side dish with the market just focusing on the entrée: tariffs.”

Trump announced a flat duty of 10% against all trading partners along with a wide menu of so-called reciprocal tariffs that already have provoked retaliation from China and others. Wall Street has been in aggressively sell-off mode for the past two days, with stocks tumbling and investors flocking to the safety of fixed income.

Previous indicators showed the labor market holding up, but the tariff moves raise the possibility that companies will hold back on hiring as they assess just what the new trade landscape will look like.

The March numbers, though, pointed to a still-strong labor market, though the January and February counts saw substantial downward revisions. In addition to the cut of 34,000 from the initial count for February, January’s growth is now at just 111,000, down 14,000 from the previous estimate.

Average hourly earnings increased 0.3% on the month, in line with the forecast, while the annual rate of 3.8% was 0.1 percentage point below the estimate and the lowest level since July 2024. The average work week was unchanged at 34.2 hours.

For March, health care was the leading growth area, consistent with prior months. The industry added 54,000 jobs, almost exactly in line with its 12-month average. Other growth areas included social assistance and retail, which both added 24,000, while transportation and warehousing showed a 23,000 increase.

Federal government positions declined by just 4,000, despite the Elon Musk-led efforts, though the Department of Government Efficiency, to pare the federal workforce. However, the BLS noted that workers on severance or paid leave are counted as employed. A report Thursday from consultancy firm Challenger, Gray & Christmas indicated that DOGE-related layoffs have totaled more than 275,000 so far.

“While Friday’s jobs report showed that the economy is still adding jobs even with the tariff uncertainty and Federal job cuts, the data is backward looking and doesn’t say anything about how employers might fare over the coming months,” said Glen Smith, chief investment officer at GDS Wealth Management.

A broader unemployment indicator that includes those not looking for work as well as workers holding part-time jobs for economic reasons — the underemployed — edged lower to 7.9%.

The survey of households, which is used to determine the unemployment rate, was closely in line with the establishment payroll count, as it showed a gain of 201,000 workers.

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Economics

China to impose 34% retaliatory tariff on all goods imported from the U.S.

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Chinese and U.S. flags flutter near The Bund, before U.S. trade delegation meet their Chinese counterparts for talks in Shanghai, China July 30, 2019.

Aly Song | Reuters

China’s finance ministry on Friday said it will impose a 34% tariff on all goods imported from the U.S. starting on April 10, following duties imposed by U.S. President Donald Trump’s administration earlier this week.

“China urges the United States to immediately cancel its unilateral tariff measures and resolve trade differences through consultation in an equal, respectful and mutually beneficial manner,” the ministry said, according to a Google translation.

It further criticized Washington’s decision to impose 34% of additional reciprocal levies on China — bringing total U.S. tariffs against the country to 54% — as “inconsistent with international trade rules” and “seriously” undermining Chinese interests, as well as endangering “global economic development and the stability of the production and supply chain,” according to a Google-translated report from Chinese state news outlet Xinhua.

Separately, China also added 11 U.S. firms to the “unreliable entities list” that the Beijing administration says have violated market rules or contractual commitments. China’s ministry of commerce also added 16 U.S. entities to its export control list and said it would implement export controls on seven types of rare-earth related items, including samarium, gadolinium and terbium.

CNBC has reached out to the White House for comment.

Beijing, which also entertained a tenuous trade relationship with Washington under Trump’s first term, had warned that it would take “resolute counter-measures” to safeguard its own interests after the White House disclosed its latest sweeping tariffs on Wednesday.

Other U.S. trading partners had held off from announcing retaliatory tariffs amid hopes of further negotiations, with the European Union nevertheless voicing a readiness to respond.

The mutual U.S.-China levies are set to impact a trade relationship worth $582.4 billion in goods in 2024, according to the Office of the U.S. Trade Representative.

Analysts expect the U.S.’ protectionist trade policies to steer China toward other trading partners and see it implement further stimulus measures in an effort to galvanize the economy. China has been battling a property crisis and weak consumer and business sentiment since the end of the Covid-19 pandemic.

China’s retaliatory tariffs announced Friday exacerbated declines in global markets which had already been thrust into turmoil by fears of inflationary, recessionary and global economic growth risks following the White House’s tariffs.

Mohamed Aly El-Erian, chief economic advisor for Allianz SE. 

El-Erian says U.S. recession risks are now ‘uncomfortably high’

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Economics

Donald Trump is attacking what made American universities great

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The conservative counter-revolution began with a secret memo, at least as the tale is often told on America’s political left, with the mix of fear and envy characteristic of the conspiracy-minded. In the summer of 1971 Lewis Powell was an eminent corporate lawyer, soon to be nominated and confirmed for the Supreme Court, when he drafted a confidential proposal for the US Chamber of Commerce. Powell laid out a costly, co-ordinated, years-long programme to counter the left’s influence in the media, the courts, the boardroom and, above all, universities. “There is reason to believe that the campus is the single most dynamic source” of an intensifying assault on free enterprise, he warned.

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