The good news is that the market thinks Trump is full of shit
Welcome to Cautious Optimism, a newsletter on tech, business, and power.
Thematically, it appears we picked the right set of issues to focus on when CO launched earlier this year.
📈 Trending Up: The Republican party … Wise earnings … Novo Nordisk earnings … bank stocks … belief in prediction markets … Perplexity …
Stocks of political note rallying pre-market: Trump Media and Technology Group up 38%, Rumble up 12%, Tesla up 13%, Coinbase +13%, bitcoin +7%
📉 Trending Down: The Democratic Party… solar-power related stocks … the Peso … Ukraine … Super Micro … Coupang …
Stocks of political note falling pre-market: NIO down 6.5% pre-market, Li Auto down 7%, Oscar Health down 17%
Well, that wasn’t even close
Currently, the numbers are 66,236,958 votes for Harris, and 71,177,549 for Trump, giving the former President a 51.0% share of the vote, and the current Vice President 47.5%. For an election in the United States, that’s a shellacking.
There will be endless mastication of the data, but here are a few things that are worth knowing:
Trump did better with younger voters. CNN data indicates that Trump lost 18-29 year old voters by 13%, far better than the 24% deficit he had in 2020 with the same demographic. A swing back towards Trump amongst 45-64 year old voters from +1 in 2020 to +8 in 2024 was also material. Notably, Trump lost ground amongst voters 65 and older, falling from +5 in 2020 to -1% in 2024.
Trump did better with voters of color. The Democratic margin amongst Black men fell from +60 for Biden in 2020 to +58 for Harris in 2024, Latino men swapped from +23 for Biden to +10 for Trump, while Latino women went from +39 for Biden in 2020 to +24 for Harris in 2024.
Trump’s hold on white America is only so strong. The same CNN dataset indicates that after white men voting +23 for Trump in 2020, he wound up just +20 in 2024; similarly, white women went from +11 for Trump in 2020 to just +5 for Trump in 2024.
We’re an education-split electorate. White voters with college degrees broke +10 for Harris in 2024, better than +3 for Biden in 2020 and +3 for Trump back in 2016. White voters with no degree went +31 for Trump, down a hair from +35 in 2020 and even more from +37 in 2016. White men with college degrees broke for Harris by a point, after handing Trump +3 back in 2020.
Trump did better with voters of color with college degrees and those without than he did in 2020 or 2016.
The gender divide is huge and pretty stable: White women with college degrees broke +20 for Harris, far ahead of their +9 for Biden in 2020 and +7 for Clinton. Overall, women were +10 for Harris and men were +10 for Trump.
The good news is that the market thinks Trump is full of shit
The big story this morning in business is a fat slug of optimism — hope that a second Trump admin will see corporate America unfettered, leading to even faster GDP growth and business profitability.
Some of the enthusiasm is reasonable. Banks will see less, and less stringent regulation under a Trump presidency than they would have under Harris while they will enjoy the same government-backstopping. A double-win there.
The enthusiasm amongst the crypto-faithful is probably directionally correct. I remain completely skeptical that Trump cares at all about digital tokens, but he has pledged to treat the industry gingerly, which is what it wants.
Finally, venture investors who bet their personal, political, and financial capital on defeating Lina Khan are probably over the moon this morning. Now, they need to actually sell their companies, but that’s for the day after the day after, I reckon. Today there’s going to be a lot of crowing and strutting.
But the rest of the enthusiasm I find puzzling. The only answer that I can summon is that, despite his campaign pledges, the market expects Trump to not do what he has promised to do.
Trump has signaled that he wants to enact general tariffs in the realm of 10-20% on all goods entering the United States, 60-100% on imports from China, and 25-100% on goods from Mexico.
This is economic and business anathema. The market is rallying. Ergo, it doesn’t think the tariffs are coming.
The Peso is not reacting like there’s too much danger; in contrast, China’s currency took a bigger dip.
Trump wants to execute mass deportations, and on the double. If that happens as Trump has claimed it will, labor availability in agriculture, construction, hospitality, and manufacturing will decline.
Pro-business groups like the Chamber of Commerce have been shouting about a labor shortage. Not a surplus. The market is rallying. Ergo, it doesn’t expect that the labor makeup of the United States is about to dramatically worsen.
There are pockets of disillusionment that make sense as well:
The Invesco Solar ETF, which tracks the solar energy industry, is off 11.5% this morning.
Stocks associated with wind power are also getting their teeth kicked in.
So, what now?
We wait. The end of the Biden-Harris era is now down to a few dozen days. Then it’s back to a Trump White House. An empowered, Supreme Court-undergirded second Trump admin.
It’s miserable news for the separation of church and state, social spending, and our international alliances. It’s going to be awful for marginalized groups like our trans brothers and sisters. Reproductive rights will continue to trend in a reactionary direction. I also do not expect much in terms of yearly deficit reduction, given promised tax cuts. Aid to Ukraine to fend off Russian aggression will likely decline. I worry about Taiwan. Climate policy is about to become anti-climate policy.
That said, I am not surprised that we are here today. One thing about democracy is that you lose a lot. Here, the values that I treasure lost by a few percentage points, and a constituently larger electoral college deficit. It will happen again in my lifetime — several times, if I am lucky to live that long.
Thanks for sticking with CO through the election cycle. Next year we’ll cover IPOs and a reordering of the government that those coming into power have promised will be extreme. Buckle up.