Monday, September 8, 2008

Futures Markets Moving to McCain

Last Thursday night I was asked what the political futures markets were saying about the McCain v. Obama election now that Governor Palin had been introduced. I replied that nothing had changed much-- yet. In fact, on the day Gov. Palin gave her speech, September 3rd, Obama futures were trading at 62 and McCain futures were at 38 (in round numbers).

So, what about this morning? Well, Obama futures have dropped to 52.8 and McCain futures have risen to 47.8. The USA Today poll showing an 11 point swing to McCain/Palin is likely driving this new assessment by traders along with other pollsters saying that the race has narrowed. Among likely voters that same poll shows McCain/Palin with a 10 point lead, 54-44.
In a somewhat related move... equity market futures are soaring today. This is largely due to the moves out of the Treasury Department. However, one should also ponder that the increasing prospects for a McCain/Palin victory, almost certainly meaning split government in Washington, is a positive for financial markets. And, Obama, over the weekend, admitted again that supply-side economic theory is correct. I'm not sure he knows he did... but he did.
UPDATE: Just before 10AM ET Monday 9/8 and futures are now... Obama 50.2, McCain 49.0