When James Comey announced the FBI was reopening its investigation into Hillary Clinton’s email server following the discovery of new emails, both the gambling and financial markets were rocked instantly.
In the betting odds, Hillary’s odds of winning the presidency declined from a peak of 83 percent to a low of 70 percent within days. Trump’s odds increased from 15 percent to 29 percent, and in the polls, momentum shifted drastically in his favor. In the markets, we saw volatility (as measured by the VIX index) spike over 10 percent following the breaking of the news, showing that the markets believed this to be severely damaging towards Hillary’s odds of victory (which had largely been priced into the markets), and the value of the Mexican peso relative to the U.S. dollar tanked.
Now, Hillary has been let off the hook yet again, and we’re seeing the opposite reaction. The peso surged 2 percent against the dollar,and the betting odds are reversing to where they were before the investigation was reopened. Just since the investigation was closed, we’ve seen nearly a 12 point gap widen in the betting odds.
The odds of victory based on Five Thirty Eight’s election model don’t update until tomorrow, but prior to the news, showed closer odds than are reflected in the betting odds.
Keep in mind however, the experts have been wrong before. Right before the Brexit vote, the odds gave a 90 percent chance that Britain would remain in the EU – and we all know how that happened next. According to Betfair, 67 percent of customers who bet in favor of the Brexit are now betting in favor of Trump winning Tuesday’s election.
Will history repeat itself in shocking the establishment yet again? All we can do at this point is get out and vote.
[Note; This post was authored by Matt Palumbo. Follow him on Twitter @MattPalumbo12]