Balancing out my last post, I thought I would point out that the online betting markets have become very important when following the election cycle.  One site, electionbettingodds.com by John Stossel & Maxim Lott shows Hillary Clinton as the early strong favorite over Donald Trump in the 2016 Presidential election by 72+% to 22+%.  The odds don't add up to 100% because of the small probabilities that someone other than Trump or Clinton is their party's nominee.

I don't think the polls or the betting odds are very predictive until after Labor Day, but they do give a sense of the collective wisdom of those following the race at this one point in time.

Kevin Spires, CFA, FRM

According to Yale Economist Ray Fair, the Republican nominee is the early favorite to easily take the 2016 U.S. Presidential Election.  Dr. Fair's econometric based model predicts the two party vote share in both the Presidential and Congressional elections.  The main inputs to his model are GDP growth, inflation, and incumbency - where the longer a party retains control of the presidency the less likely the public is to vote for that party going forward.

According to Fair's model, The 2016 election cycle is very unfriendly to the Democratic Party.  With the second term of the Obama presidency coming to a close, a bias to change parties and give the other side a chance gives the Republicans a strong head start.  Coupled with tepid economic growth the impetus to change could be overwhelming.  According to Fair's model - which has been within 2% of the winner's vote percentage in every year since 1978, the Republicans should win the presidency 55-45% and win Congress with a 54.5-45.5% margin.

Given Ray Fair's model - which doesn't know anything about Trump or Clinton - get ready to say "President Donald J. Trump."  The only wildcard that might tip the election to Clinton is a third party run to the right of Trump that siphons off enough votes in swing states to cost Trump the election.