By Saqib Iqbal Ahmed and Suzanne McGee
NEW YORK- Corners of financial markets that could feel the impact of a Donald Trump victory are stirring again, as the US presidential race tightens with less than three weeks until Election Day.
Assets ranging from small-cap stocks to bitcoin have climbed in recent weeks while the Mexican peso and Treasuries have slipped, as polls show a tight race between Republican candidate Trump and his Democratic opponent, Vice President Kamala Harris.
The moves echo the so-called Trump trades from earlier this year when he pulled ahead of President Joe Biden, only to fade after Biden withdrew.
Harris led Trump by a marginal 45 percent to 42 percent in a Reuters/Ipsos poll released on Tuesday, a tighter race than the same poll showed several weeks earlier.
Trump has taken the lead in online prediction markets such as PredictIt and Polymarket. Polymarket last favored him 61 percent to 39 percent over Harris.
Trump’s gains on Polymarket might stem from a group of four Polymarket accounts that have collectively spent about $30 million worth of cryptocurrency on bets that he will win, the Wall Street Journal reported on Friday. Polymarket did not immediately respond to a request for comment.
Investors caution, however, that linking the investment moves to Trump this time is more difficult, as many can also be tied to rising economic optimism following a blowout US jobs report this month and a 50-basis-point interest-rate cut from the Federal Reserve last month.
“Some of this certainly could be being driven by Trump’s improved position in the predictive markets,” said Steve Sosnick, chief strategist at Interactive Brokers.
Due to strong economic data, however, “it’s really hard to separate cause from effect, much less separate different causes,” he said. – Reuters
