After the 2016 election I learned not to use polling data as a reliable data point for prejudging an election.
The biases of these polling outfits is quite evident. A case in point from Wednesday. Why would Democratic nominee Joe Biden drag ex-President Barack Obama up to a small rally in Michigan if the Dem candidate held a 12-point lead in the state as said by three recent polls?
That being said, I look to Wall Street for the most relevant data. They can afford to buy the best research to make the most profit from the election. I knew President Trump was winning in 2016 before anyone called it by the futures market at around 10 PM or so.
So yesterday’s almost 1,000-point decline on the Dow Jones industrial average had me concerned. Daily market handicapping said it was because the Covid-19 stimulus bill was not getting passed.
The market knows House Speaker Nancy Pelosi was not going to give Trump an aid bill to sign right before an election — no matter how much hardship that would bring to Americans.
No, my concern is that some institutional investors or big banks are seeing their own polling data suggesting the race is closer than I believe it is. We are scheduled to see the second revision of GDP numbers on Friday, which should show a large jump after the Covid-19 lock down devastated second quarter numbers.
So I don’t see an economic reason behind the most recent sell off in equities.
An alternative view is that the Hunter Biden laptop revelations released by Tony Bobulinski could be behind the decline since Joe Biden received far more donations from Wall Street than Trump.
I believe those contribution numbers were more of a CYA pledge by Wall Street than anything else. Why would large finance firms be backing a candidate pledging higher personal and business taxes?
Let’s keep an eye on the market going forward. Thursday morning’s future look like a dead-cat bounce as pricing is up slightly.