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Some political analysts predicted that Trump’s measured performance in the Oct. 22 debate, coupled with Joe Biden’s call for shuttering the job-rich oil and gas industries, should give the President a big lift in the final days of the campaign. Furthermore, the contrast between Biden’s sauntering pace and the manic barnstorming that’s taking Trump through three battleground states a day would also, in theory, help him build momentum.
Instead, what appears to be dictating Trump’s chances of victory is the same irresistible force that’s been shaping his poll numbers and odds on political betting sites since late May: the course of the pandemic. The post-debate period hasn’t seen any decoupling between the zigzagging good and bad news about the plague, and Trump’s up-and-down prospects for winning. As COVID-19 goes, Trump’s fortunes follow. Most important is the trend. When the curve of new infections heads downward, the public believes, or at least hopes, that the worst is over, and that Trump is getting the ravages under control. When cases jump, folks fear that their lives won’t get back to normal, and lost jobs won’t return, for a long time. They blame the President for a strategy that’s consistently erratic.
Unfortunately for Trump, the pandemic is staging a big resurgence just when he needs the trajectory to go in the opposite direction. The surge in daily cases swamps the Biden fracking gaffe and is blunting any Trump momentum. His riposte on the stump that voters should just go about their lives and stop worrying is unlikely to sell.
To review the pandemic’s unyielding power in the election, let’s look at the period starting before the debate through today. Our measure is the correlation between the number of new daily cases and Trump’s odds of winning on the political futures sites where people put “skin in the game” by wagering cash on a Trump or Biden victory. For the betting odds, we’ll use two sources: the RealClearPolitics average of eight top venues, and PredictIt, the only U.S. site approved for betting on U.S. elections. (The PredictIt futures are not included in the RealClear average.)
To put the recent moves in context, let’s look back to late September, when Trump’s numbers looked pretty good. On Sept. 29, Trump’s RealClear odds trailed Biden’s 45.2% to 54.7%, not a huge deficit. That difference had been fairly constant for the previous three weeks. The stable gap, showing Trump within striking distance, correlated closely with a sharp drop, then a leveling off, of COVID cases. By Sept. 5, the daily count had fallen to around 37,000 from 66,000 in late July. Then, the curve dipped even more, before flatlining until early October. At that point, infections took off, hitting 53,000 on Oct. 15. From the close of September to that date, Trump’s odds fell from 45.2% to 36.3%. Over the same period, Trump’s line on PredictIt went from 42% to 39%.
Then, cases briefly went flat, averaging in the mid-50,000s from Oct. 16 to Oct. 20, two days before the debate. Trump’s odds also improved, rising to 39% on RealClear and 38.5% on PredictIt. The Thursday night debate gave Trump a further boost on PredictIt to 40%. Interestingly, bettors on the sites polled by RealClear marked Trump down after he crossed swords with the former Vice President, lowering his chances from 39% to 35%. The PredictIt bump was short-lived; Trump now stands at 38.5%, right where he was before the face-off with Biden. On RealClear, Trump’s prospects are unchanged at 35%.
Trump got a reprieve when cases briefly steadied before the debate, but garnered either nothing, or the slightest lift, from what appeared to be a good showing in Nashville. The reason? The day of the debate, cases started a moonshot. They vaulted from 60,000 on Oct. 21 to 74,000 the next day as the candidates took the stage. Infections kept climbing to 83,000 on Oct. 23, breaking the mid-July record of 75,000. Whatever good the debate did Trump was countered by the wallop of the resurgent pandemic.
It would be a boon for Trump if cases retreat in the week of the election. A downward inflection, even a brief one, has helped him in the past. But as the gambling sites show, the odds of that happening are long, and time is short.
More must-read finance coverage from Fortune:
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- Procter & Gamble shows that increasing spending during a recession is worth it
- Stocks in “election-sensitive” sectors seem oblivious to which candidate wins. Why?
