Wall Street turns on pollsters as U.S election leaves markets in limbo

In this news, we discuss the Wall Street turns on pollsters as U.S election leaves markets in limbo.

LONDON / NEW YORK (Reuters) – Wall Street is sick of the polls.

Ahead of Tuesday’s US election, popular polls were hesitant about who would win and by how much. In the space of a few months, they went from a probable victory for Republican President Donald Trump to a close election race, then to a victory for Democratic candidate Joe Biden.

The vote tally on Wednesday offered another big bag of uncertainty over who will lead the White House in the next term.

“I am absolutely perplexed as to why we believe in these bloody polls,” said Stuart Oakley, global head of spot currency trading at Nomura, citing bad polls in previous US and UK elections, as well as on Brexit.

“The polls are so wrong every time. Why do we give them any credibility? It’s just amazing how this continues to happen.

The big global banks and hedge funds hired survey companies to supplement what they saw in the publicly available data, but without necessarily gaining an advantage.

“It’s probably Waterloo for pollsters,” said Simon Maughan, head of Trading Alpha at Liquidnet, making a comparison between today’s political polls and the battle that ended the reign of the French emperor. Napoleon.

“Everything they do to reach people is not working,” said Maughan.

Pollsters have struggled to accurately gauge people’s voting intentions during a rise in populist politics over the past decade. As the candidates have become less moderate and more headstrong, voters may support someone who says controversial things but doesn’t want to admit it to their colleagues, friends and family, let alone a pollster. [nL4N2HL13U]

Even Trump tweeted on Wednesday that his lead in the polls had “magically disappeared.” His comment added to a wider review of sites like FiveThirtyEight, which claims to have poll tactics that give them an edge that isn’t always obvious in results.

Reuters is conducting its own polls with a company called Ipsos. The most recent victories predicted for Biden in Wisconsin, Michigan and Pennsylvania, and a narrow victory in Florida. [nL1N2HK3G3]

The top three remained uncertain on Wednesday afternoon as there weren’t enough votes counted as Florida moved towards Trump.

After Trump beat his opponent in 2016 – the opposite of what preeminent polls predicted – some financial companies hired their own employees to call voters with unique questions and gain an advantage for themselves or their clients. While this has helped some hedge funds reap profits around Brexit, success has been rare.

For example, an executive at a major bank told Reuters ahead of Tuesday’s election that he had hired his own polling firm, which convinced management that a Biden victory was likely. The reasons? A high turnout tends to be good for Democrats, the idea that people don’t want to admit their support for Trump in polls is wrong, and pollsters are generally not in the same direction in elections. consecutive presidential elections, said the executive. [nL1N2HL1IN]

A large U.S. hedge fund also had its own poll, which predicted Biden to be ahead, but in a much tighter race, one investor said. Their private poll also showed Republicans would retain the Senate, which was not a uniform assumption.

While Biden is still in the lead, assumptions of a landslide or that Democrats would sweep the Senate have been incorrect. Although millions of votes are still being counted, Trump got far more support than pollsters expected in some states, especially Florida.

“If I were in the polling business I would be seriously bothered,” said Peter Kraus, a former Goldman Sachs executive who founded asset management firm Aperture Investments in 2018. “Samples just aren’t fairly accurate and the margins of error are much larger than they should be.

Kraus doesn’t believe Trump supporters are reluctant to reveal their allegiance to pollsters.

“The ‘shy Trump’ thing doesn’t make sense to me,” he said. “Trump voters put flags on their cars and take to the streets!”

Nate Silver, who runs FiveThirtyEight, championed the predictions of Twitter like others have posted reviews. He has long argued that survey companies are fallible: they offer predictions with margins of error, rather than certainties.

Some investors have gone so far as to say that the era of polls is over. Big business will stop investing in the usual polls and try to determine election results in a different way, they said.

Tom di Galoma, managing director of New York-based Seaport Global Holdings, predicted that voter intent assessment strategies would shift more to internet searches as people rarely pick up their phones for random numbers .

“You can’t believe the polls,” he said.

Reporting by Simon Jessop, Lawrence White and Svea Herbst-Bayliss; Additional reporting by Anna Irrera, Matt Scuffham, Herb Lash, Ross Kerber, Alwyn Scott, Carolyn Cohn and Tom Westbrook; Editing by Lauren Tara LaCapra and Tom Brown

Original © Thomson Reuters

Originally posted 2020-11-04 11:26:12.

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