May 11, 2020 - Economy & Business

The money is on Trump

Dion Rabouin, author of Markets

Illustration: Aïda Amer/Axios

Even after the White House's delayed response to the coronavirus outbreak, unprecedented job losses and a bruising recession, investors and betting markets are still putting their money on President Trump to win re-election.

The big picture: Presumptive Democratic presidential nominee Joe Biden holds a sizable lead in most national and individual swing state polls — but money managers expect Trump to retake the White House in November.

  • In a late April survey of U.S.-based investors with at least $1 million of assets, UBS found that 53% said they planned to vote for Biden.
  • But 52% think Trump will win.

The intrigue: The world's most popular betting destinations show Trump as the clear favorite.

  • The RealClearPolitics average of betting websites gives the advantage to Trump with an average spread of 8.2 as of Sunday night.
  • Casino sportsbooks are paying around $83 for winning bets on Trump versus $135 for winning bets on Biden, making Biden the unequivocal underdog, Bovada shows.

What we're hearing: The expectation for Trump to triumph seems to largely reflect optimism about the economy once various state and local lockdown orders end, economists say.

"We can’t expect that the economy is going to be in very good shape, although the trajectory ought to be pretty positive by November," Steve Skancke, a former Treasury Department and Council on Economic Affairs official in the Carter and Reagan administrations, tells Axios.

  • As November approaches, it's "more than likely we’re going to see a positive stock market and there will be positive job growth," says Skancke, now chief economic advisor at wealth manager Keel Point.

Between the lines: "The wildcard obviously is the virus and the [potential] vaccine," Mark Zandi, chief economist at Moody's Investor Service, tells Axios.

  • "And that’s a very significant wildcard both on the downside and the upside for people’s perceptions of how the president managed all this and how they’re going to vote in November."

Yes, but: Thus far Trump has not gotten the expected bump that comes from national catastrophes as Americans typically rally around the flag and the president, says Bernard Baumohl, chief economist at The Economic Outlook Group.

  • "These are times when the nation as a whole, the American people, will look to the president and the White House for policies that will get them out of this mess and all they’re seeing is rhetoric designed to get Trump re-elected," he tells Axios.
  • "He wants to see the economy be revived again but before it’s safe to do so. That I think is going to become somewhat catastrophic when the numbers start to pick up for that second wave" of infections.

The bottom line: The election is likely to be a referendum on how Trump handles the pandemic and whether his push to restart the economy got the U.S. back on track or drove a second wave of infections that did even more damage.

Go deeper

Updated 35 mins ago - Politics & Policy

Updates: George Floyd protests continue past curfews

Police officers wearing riot gear push back demonstrators outside of the White House on Monday. Photo: Jose Luis Magana/AFP via Getty Images

Protests over the death of George Floyd and other police-related killings of black people continued Tuesday across the U.S. for the eighth consecutive day, prompting a federal response from the National Guard, Immigration and Customs Enforcement and Customs and Border Protection.

The latest: Even with early curfews in New York City and Washington, D.C., protesters are still out en masse. Some protesters in D.C. said they were galvanized by President Trump's photo op in front of St. John's Church on Monday and threat to deploy U.S. troops in the rest of country if violence isn't quelled, NBC News reports.

Updated 45 mins ago - Politics & Policy

Trump backs off push to federalize forces against riots

Photo: Brendan Smialowski /AFP via Getty Images

A day after threatening to federalize forces to snuff out riots across the country, the president appears to be backing off the idea of invoking the Insurrection Act, sources familiar with his plans tell Axios.

What we're hearing: Aides say he hasn’t ruled out its use at some point, but that he's “pleased” with the way protests were handled last night (apart from in New York City, as he indicated on Twitter today) — and that for now he's satisfied with leaving the crackdown to states through local law enforcement and the National Guard.

What we expect from our bosses

Illustration: Eniola Odetunde/Axios

Workers — especially millennials and Gen Zers — are paying close attention to the words and actions of their employers during national crises, such as the protests following the killing of George Floyd in police custody.

Why it matters: American companies have an enormous amount of wealth and influence that they can put toward effecting change, and CEOs have the potential to fill the leadership vacuum left by government inaction. More and more rank-and-file employees expect their bosses to do something with that money and power.