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Billionaire investor Stan Druckenmiller is confident that the stock market’s recent upswing is directly related to former President Donald Trump’s chances of winning the 2024 race.

Speaking with Bloomberg last week, he said that the stock market seems “very convinced Trump is going to win.”

“You can see it in the bank stocks — you can see it in crypto,” he added.

Druckenmiller for his part won’t be voting for Trump because he thinks he’s a “blowhard.” The good news for conservatives is he also doesn’t intend to vote for Vice President Kamala Harris because he readily admits she’d be bad for businesses.

In fact, earlier this year he bashed the Biden-Harris administration’s so-called Bidenomics, saying that if he could grade it, he’d give it an F.

Dovetailing back to the present, he told Bloomberg he’ll “probably write in someone when I go to the polls.”

Fair enough.

Continuing his remarks, he predicted that, even if Harris does somehow eke out a victory, it’s “extremely unlikely” that Democrats will also gain full control of Congress.

“If there were a so-called blue sweep, he said, equities may be troubled for three to six months,” according to Bloomberg. “He also said that a red sweep is ‘probably more likely than a Trump presidency with a blue Congress.’”

Themos Fiotakis, the global head of foreign exchange and emerging markets macro strategy at Barclays, agrees with Druckenmiller.

“It’s absolutely fair to say that the election has become a lot bigger of a driver in markets,” he told The Wall Street Journal. “The moves are big, and the implied moves [in the options market are big]. [Betting against the currencies, and on the dollar] is no longer a cheap no-brainer like it was two or three weeks ago.”

Druckenmiller’s remarks to Bloomberg came a few days before the Journal ran a report revealing that some large hedge funds and money managers “are getting behind trades that could pay out if Donald Trump beats Kamala Harris in the presidential election.”

Take hedge-fund manager Dan Loeb, who’s begun “positioning his $11 billion firm, Third Point, to profit from a Republican victory,” according to an internal investor letter that’s been reviewed by the Journal.

“We believe the proposed ‘America First’ policy’s tariffs will increase domestic manufacturing, infrastructure spending, and prices of certain materials and commodities,” Loeb wrote in the letter. “We also believe that a reduction in regulation generally and especially in the activist antitrust stance of the Biden-Harris administration will unleash productivity and a wave of corporate activity.”

Loeb has been critical of Democrat vice-presidential candidate Tim Walz on Twitter/X:

Next is Mark Dowding, the chief investment officer of RBC BlueBay Fixed Income at RBC BlueBay Asset Management. He’s been ramping up trades since the end of September.

“Dowding is betting the dollar will strengthen and the U.S. yield curve will steepen, meaning long-term rates will go up more than short-term ones,” the Journal notes. “He is also wagering inflation break evens—essentially, bond-market measures of price pressures—will widen.”

“All three bets reflect Dowding’s belief that Trump’s agenda will stoke inflation, due largely to tariffs. Trump has pledged sweeping tariffs of 10% to 20% on imported goods, and 60%-plus levies on goods from China,” according to the Journal.

Not everybody agrees. Take Vineer Bhansali, the founder of the California hedge fund firm LongTail Alpha.

“The market has an expectation that, generally, a Trump win is good for the market and that a Kamala win would be bad for the market,” he said. “I think there is a possibility that if Kamala wins…markets could rally.”

Anything is certainly possible …

Other hedge-fund managers meanwhile are playing it safe, lest they lose money.

“The incentive for any of them to make big bets on what still seems pretty uncertain, it just doesn’t behoove them or their investors,” Jon Caplis,  the chief executive of PivotalPath, told the Journal.

Some are even playing it safer by reducing positions ahead of Nov. 5th. Take Zachary Kurz, the founder of PinnBrook Capital.

“The Mexican election surprised people negatively, the Indian election surprised people negatively, and the French election surprised people negatively,” he said, noting that nobody knows for sure what will happen next month.

Vivek Saxena
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