JPMorgan's market guru who called the comeback says Trump's reelection chances are rising

Published Mon, Aug 31 202010:20 AM EDTUpdated Mon, Aug 31 20203:59 PM EDT

(This story is for CNBC PRO subscribers only.) President Donald Trump's reelection chances are rising, and that could leave investors positioned for a Biden victory in the dust, according to JPMorgan's Marko Kolanovic. "We currently believe that momentum in favor of Trump will continue, while the most investors are still positioned for a Biden win," he said in a note to clients Monday. "The impact on sectors and factors (momentum vs value, cyclicals vs tech, ESG) could be dramatic and investment portfolios should adjust for a potential Trump re-election," he added. Kolanovic, who is JPMorgan's global head of macro quantitative and derivatives strategy, is known lately for his often prescient calls. He correctly predicted the market's bottom in March and has been bullish on stocks since. JPMorgan said the betting odds are now virtually tied, after Trump lagged former Vice President Joe Biden by as much as 25 points earlier in August. The firm attributes the sudden jump in Trump's odds to two factors: "the impact of the degree of violence in protests on public opinion and voting patterns" and "bias in polls due to Trump voters being more likely to decline or mislead polls." JPMorgan said another important driver of the 2020 election is progress on the Covid-19 front, noting that "declining cases may further provide a boost to Trump's election odds." The firm's call is at odds with other Street predictions. The Q3 survey of the CNBC Global CFO Council found that 75% of global CFOs believe Biden will win. According to Nate Silver's FiveThirtyEight, Biden has a 70% chance of winning. Silver responded to Kolanovic's call, questioning the data on which it was based. "Both of these propositions are almost entirely lacking in evidence, to the point where they're more superstitious than empirical, but are an interesting window into the mindset of techbros and financebros who are buying up Trump shares on prediction markets," he said in a tweet. - CNBC's Michael Bloom contributed reporting.

President Donald Trump

Saul Loeb | AFP | Getty Images

(This story is for CNBC PRO subscribers only.)

President Donald Trump's reelection chances are rising, and that could leave investors positioned for a Biden victory in the dust, according to JPMorgan's Marko Kolanovic.

"We currently believe that momentum in favor of Trump will continue, while the most investors are still positioned for a Biden win," he said in a note to clients Monday. "The impact on sectors and factors (momentum vs value, cyclicals vs tech, ESG) could be dramatic and investment portfolios should adjust for a potential Trump re-election," he added.

Kolanovic, who is JPMorgan's global head of macro quantitative and derivatives strategy, is known lately for his often prescient calls. He correctly predicted the market's bottom in March and has been bullish on stocks since.