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INVESTORS BETTING ON DEMOCRATIC SWEEP AFTER BIDEN WINS DEBATE

The debate between Democratic presidential candidate Joe Biden and President Donald Trump, marred by frequent interruptions and name-calling, did little to enlighten the electorate. But it was enough to turn the consensus on Wall Street toward Biden, April Joyner and David Randall reported for Reuters

The fractious Sept. 29 faceoff led to a jump in Biden’s lead over Trump in several national polls, fueling moves in a broad range of assets sensitive to a decisive Democratic victory, from clean energy companies and US government bonds to foreign exchange derivatives that hedge against market volatility. Shares of alternative energy companies, which analysts expect to prosper from policies under a Biden administration, have climbed sharply since the debate. In currency markets, bets on post-election volatility are waning - evidence of investors positioning for a strong win for the Democrat. In Treasury markets, a bout of selling on expectations of a hefty Biden-led stimulus package has helped send yields to their highest levels in months. 


A second debate - which may be delayed or not take place at all - “is critical for the president, but I don’t think it matters at all to Biden. He can coast to the election,” said Jamie Cox, managing partner for Harris Financial Group. 


The former vice president opened up a 10-point advantage among likely voters in an Oct. 3 poll by Reuters/Ipsos, a 1 to 2 point increase over his previous lead, following the presidential debate. Despite the skepticism about opinion polls after Trump’s surprise win in 2016, investors have since increased bets that the Democrat will have a clear-cut victory. “Our highest probability is of a Biden win and a Democratic sweep and that keeps increasing,” said John Briggs, Americas head of strategy at NatWest Markets. “We had some client pushback on that idea but after the debate that turned around quite a bit.”




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