Welcome to another week! For the new readers: every week I comment on the top prediction markets—selected by volume, volatility and surprising resolutions—across (geo)politics, elections, macro, tech and science. Markets first, news through their lens, not the other way around.
Let’s see what changed in the world!
Weekly Outlook
US Inc.
Midterms Results
The midterms are over and I think everyone is still recovering. Blue tsunami bulls are still performing victory laps on X, while GOP-aligned analysts and forecasters are still in shock. However, they are slowly waking up and blaming the Iran war for everything bad that happened:
Before we venture into the post-midterms world, let’s recap what exactly happened on November 3. Democrats won Texas (both Senate and Governor races), South Carolina Senate, and most likely will end up with two more seats, Alaska:
And Mississippi:
For a final tally of D 56, R 44. The first casualty of the defeat is Susie Wiles, who was replaced as the White House Chief of Staff by Stephen Miller. Another one might be Pete Hegseth, the face of the Iran war:
2028 Presidential Election
The midterms also caused a sharp repricing on the 2028 presidential nominee markets:
On the blue side, Jon Ossoff is now a clear favorite. His strong performance in the Georgia Senate race makes him a tried and tested contender in challenging elections.
Ossoff, obviously, denies having any interest in running. And Gavin Newsom fell at the first whiff of another serious male contender. The right side of social media would surely have a laugh about it if it weren’t mourning the midterms loss.
Speaking of, it also produced a new status quo on the red side. Ron DeSantis joined JD Vance and Marco Rubio among serious contenders for the nomination. Ever since Trump won the presidency everyone imagined he would endorse his successor. Before the midterms, no one had a chance to compete with that. Now, after a major defeat, this is once again a reality, a possible new chapter for the GOP, making for an extremely interesting primary.
The Fed
Financial markets also reacted to the midterms results. There, however, the effect disappeared in just a couple of days. The Fed is still largely expected to hike next month.
The Americas
No active forecast/market to report on.
Asia
New Zealand Election
Last week, New Zealand held a legislative election. In a strange and extremely close race, the National Party is expected to lose the party vote 29.21% to 29.36%. However, it is expected to win more seats, 42 to 36 (there are electorate and list seats in NZ; all National Party seats are electorate). And seats are what the market resolves on.
The winner market might be clear, but there are 400,000 (in a 5 mln people country) special votes still uncounted, and they historically lean left. At the moment, the right bloc (National + ACT + NZ First) is expected to have a 67 seats in a 131-seat parliament. The race for power remains close and the official results are only due November 27.
Middle East & Africa
The Iran War
The Iran war not only caused Republicans to lose the midterms. It looks very likely to drag on for months to come. The US-Iran Final Nuclear Deal markets are constantly reaching new lows. On top of that, Trump restarted selective strikes on Iran on the eve of the midterms. Since then we saw one more incident, with a third claim unconfirmed.
However, traders don’t expect the strikes to last for long, seeing a 60% chance we will have a 2-week period with no strikes that begins by the end of the month:
They also expect the double blockade regime to remain in force at least until the end of the year:
JD Vance reportedly leads some behind the scenes effort to reach a deal, but as you see, the markets are shy to rise. However, it may change by the end of the day as Trump met with Qatar’s PM and Iran is reportedly open to a deal.
The Houthis
The Houthis and Saudi Arabia continue to exchange strikes. There were reports of a Houthi incursion into Saudi Arabia, but they remain unconfirmed by either side.
In the meantime, the market on Bab-el-Mandeb closing reprices towards its fair value.
Israel
In Israel, Gadi Eisenkot was designated by the president to form a government. He now has up to 42 days to do so. Eisenkot could theoretically reach about 61 seats if UTJ joins and Shas does not oppose.
However, Eisenkot called for a national emergency government on November 8, and invited Likud and Religious Zionism members who accept his four principles. Traders are increasingly bullish on Gadi becoming the next prime minister of Israel.
Europe
The Ukraine War
Russia-Ukraine markets are absolutely flat. Despite a major anti-sabotage operation in Poland, near the border with Kaliningrad, no market seems to see any risk of a serious Russia-NATO escalation.
The same goes for a ceasefire—ceasefire markets price only a low baseline chance a deal happens. There is simply nothing to suggest a deal might be even slightly more likely than usual.
Spain
Spain holds a legislative election on November 29, after the current prime minister, Pedro Sánchez, called a snap election. His decision came after repeatedly failing to pass housing legislation, a core campaign promise.
Back in 2023, Sánchez narrowly became PM, after he created a wide coalition of anti-right parties that allowed him to pass an investiture vote. However, now PP and Vox, the two right-wing parties, are widely expected to win a majority and form a government together.
Spain has a fascinating and wild political world, and I will cover it in a bit more detail in the coming weeks.
France
In France, Marine Le Pen widened her lead in the polls, causing the market to rise by almost 6 points. Le Pen is the beneficiary of the recent bout of violent protests. The real campaign, however, is well ahead of us and plenty can change before then.
Other
AI
Anthropic IPO date market had a volatile moment after WSJ and Reuters reported that investors doubt the $1.5T valuation and a November listing. However, a couple of days later it turned out that the planned roadshow is still expected to start as planned, building back confidence in the November listing.
Wrap up
That’s all for today! Recently I’ve been back to working on geopolitics along with increasing my election coverage. I have now a running forecast on main Iran war and Ukraine war markets. I also have a Spain model for the legislative elections with an article in the making.
I think I’ll start with the geopolitics piece. We’ve had a few escalations recently that warrant an update. We are still 3 weeks away from the Spanish election so I hope to publish a forecast early next week and update it regularly after that.
The schedule is busy in Q4 so stay strong and see you soon!
This is not official investment or life advice. Do your own research. These are only my opinions and I encourage anyone to do their own research before putting any money anywhere.