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Jim Bianco Profile picture
@biancoresearch
Oct 2, 2020 • 5 tweets • 2 min read • Read on X
Too many are "misreading" the polls, betting markets and investor opinion around the election. They are not the same.

Please read this short thread ….

The poll analyzers were only giving Trump a 10% to 20% chance of winning (shown are FiveThirtyEight and the Economist)

(1/5)
Betting markets gave Trump a 42% chance of winning yesterday before the announcement of the positive COVID test. His odds were 47% before Tuesday’s debate. Now they give Trump a 39% chance. This marks Biden’s largest lead.

(2/5)
Investors were more aligned with the betting markets than the polls.

FT – (Sep 25) Investors anticipate Joe Biden election win

UK pollster Survation found that 60 percent of 91 investment professionals polled in Sep, most based in the US, believe Mr Biden will win

(3/5)
The difference between polls and bettors was going to be reconciled by election day. Today’s announcement that Trump tested positive for COVID only accelerates the process.

Betting markets are reducing Trump’s odds of victory and are aligning more closely with the polls.

(4/5)
We have contended the markets never fully priced in a Biden victory (and the increased regulation and higher taxes that come with it). Based on trading this morning, it appears they are now taking the prospect of a Biden presidency more seriously.

(5/5)

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More from @biancoresearch

Jim Bianco Profile picture
May 1
1/9
ISM was released this morning, marking the first monthly data point since Liberation Day.

It beat expectations and is not giving indications that manufacturers "froze" or "hit a wall" post Liberation Day.
--
*US APRIL ISM MANUFACTURING INDEX FALLS TO 48.7; EST. 47.9 Image
2/9
It is consistent with decent NON-TARIFF growth. Image
3/9
Why did bonds not like it (yields moved higher)?  Maybe prices paid (tariffs?) Image
Read 9 tweets
Jim Bianco Profile picture
Apr 30
1/6
Wall Street only cares about weak growth and wants cuts.

Main Street cares about higher prices.

The Fed is aligned with Main Street.
🧵
--
Polymarket betting is as good a gauge as any to measure the consensus opinion.

Now, 70% expect that a recession will occur in 2025. Image
2/6
So explain this ...

Why is there only a 9% chance of a cut next week? Image
3/6
ASSUMING NO CUT NEXT WEEK, the probability of a cut on June 19 is just 60%. Image
Read 6 tweets
Jim Bianco Profile picture
Apr 13
1/7
Yesterday, I made the case that tariff-driven inflation expectations are soaring, driving the bond market, and paralyzing the Fed from cutting despite fears of a recession.



In the 🧵I will address some retorts.
2/7
Yesterday I noted the soaring surveys of inflation expectations and included this chart. Image
3/7
The retort is the chart above, the Fed's favorite measure of inflation expectations (IE): the 5y/5y inflation breakeven.

This is the 5yr avg inflation rate in 5 years (10yr IE, the 5yr IE, and back into the 5yr/5yr IE).

It is slumping and nearly a 3-year low. Image
Read 7 tweets
Jim Bianco Profile picture
Apr 12
1/16

What Happened to Bonds Last Week?

🧵

Last week, the 30-year yield rose 46 basis points last week to end at 4.87%.

As this chart shows, this was its biggest weekly rise since April 1987 (38 years ago!). Image
2/16

Why Did This Happen?

Let's start with what it was not. It was not data that suggested the economy was strong or recent inflation was high.

Here is a tick chart of the last 3-days of the 10-year yield.Image
3/16

The better-than-expected CPI and PPI reports (green) had no impact on the 10-year yield.

The worst-than-expected Michigan Survey (red), with its collapse in sentiment implying a severe slowdown or recession, did nothing to stop the drive in yields to the highs of the day.
Read 16 tweets
Jim Bianco Profile picture
Apr 11
1/6
Bonds are getting crushed again today. Now it looks like selling is coming from foreigners, especially Europe.

China is believed to hold several hundred billion of US Treasuries in legal entities in Belgium and Luxembourg.
🧵
2/6
The 10-year continues to get crushed today ... just traded 4.57%.

Higher than Tuesday's peak of 4.51%

*US 10-YEAR YIELD HITS HIGHEST SINCE FEBRUARY AS SELLOFF RESUMES Image
3/6
Where is the selling coming from?
Answer: Europe

The dollar is going straight down, and US yields are going straight up as this chart shows.

This relationship has broken this week. Image
Read 6 tweets
Jim Bianco Profile picture
Apr 10
1/4
How stressed are markets? By this metric, the most in 17 years.
---
SPY = The S&P 500 Index Trust. This was the first ETF created in 1993 and is one of the largest at $575 billion.
----
The middle panel is SPY's Net Asset Value (NAV). The price closed at a 90-basis-point premium to the underlying value of the assets.

The last time anything like this happened was 2008. To emphasize, not even in the crazy days of 2020 did its divergence get this big.Image
2/4
VOO = Vanguard S&P 500, $566 billion in assets

At the same time VOO, which is Vanguard's version of SPY, went out at one of its biggest discounts in years (middle panel). Image
3/4
Finally, IVV iShares Core S&P 500 ETF, $559 billion in assets
It has been trading at a persistent discount for a few weeks (middle panel). Image
Read 4 tweets

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