The Washington Post - 14.11.2019

THURSDAY, NOVEMBER 14 , 2019. THE WASHINGTON POST EZ RE A21

THE MARKETS

6 Monitor your investments at washingtonpost.com/markets Data and graphics by

GGainers and Losers from the S&P 1500 Index

CCompany CClose

1 1D %

Chg

Energizer Inc 48.38 15.2

Amer Public Edu 26.83 12.6

Covetrus Inc 13.69 11.7

Walt Disney Co/The 148.72 7.3

Arrowhead Pharma 48.51 7.1

Exelixis Inc 16.37 6.7

Uniti Group Inc 6.54 6.2

Tivity Health Inc 19.63 5.8

AMAG Pharmaceuticals 9.69 5.2

Invacare Corp 9.85 5.2

Lumber Liquidators 8.75 4.8

Chesapeake Energy 0.70 4.8

Meridian Bioscience 8.51 4.4

Tech Data Corp 130.89 4.4

Centrl Grdn & Pet Co 31.83 3.9

Endo International 4.29 3.7

Resideo Technologies 9.09 3.6

Centrl Grdn & Pet Co 29.79 3.5

Chico's FAS Inc 3.92 3.4

National Beverage 43.30 3.4

¬

CCompany CClose

1 1D %

Chg

KLX Energy Services 8.58 -11.1

Varex Imaging Corp 29.42 -9.9

SunCoke Energy Inc 4.73 -9.2

Providence Service 64.53 -9.0

Tupperware Brands 8.66 -8.8

Pennant Group Inc 16.28 -8.1

Rayonier Adv Matrl 4.11 -7.8

Oasis Petroleum Inc 2.86 -6.5

New Media Invst Grp 6.68 -6.3

II-VI Inc 30.51 -6.1

Mosaic Co/The 19.68 -6.0

iRobot Corp 44.91 -5.8

EW Scripps Co/The 14.35 -5.5

Briggs & Stratton 6.61 -5.4

Matson Inc 37.00 -5.4

Veritiv Corp 18.10 -5.2

Patterson-UTI Energy 8.58 -5.1

SM Energy Co 9.21 -5.1

Exterran Corp 7.86 -5.0

TETRA Technologies 1.38 -4.8

LIBOR 3-Month

1 1.91%

New Car Loan Natl

4 4.46

CClose

8,482.10



ND J F M A M J J A S ON

2,350

2,720

3,100

'18

6-month bill

Yield:

1.58%

Japan ¥

108.85

Markets YTD % Chg

Americas Close

Daily

% Chg-20.7% +20.7%

BRAZIL IBOVESPA INDEX 106060.00 -0.6

S&P/TSX COMPOSITE INDEX 16957.99 0.3

S&P/BMV IPC 43098.66 0.0

5-yr note

Yield:

1.70%

$1000 invested over 1 Year

30-Yr Fixed mtge

3.79%

18

Close

3,094.04

5Yr CD Natl

1.43

EU €

0.91

Currency Exchange

Note: Bank prime is from 10 major banks. Federal Funds rate is the market

rate, which can vary from the federal target rate. LIBOR is the London

Interbank Offered Rate. Consumer rates are from Bankrate. All figures as of

4:30 p.m. New York time.

Canada $

1.33

Mexico $

19.36

ND J F M A M J J A S ON

21,790

24,790

27,790

'18

2-yr note

Yield:

1.64%

Britain £

0.78

Money Market Natl

0.58

ND J F M A M J J A S ON

6,100

7,200

8,500

'18

1D % Change

0.3%

1D % Change

0.0%

1Yr CD Natl

1.15

Bank Prime

4.75%

Data and graphics by:

6Mo CD Natl

0.80

1D % Change

0.1%

YTD % Change

23.4%

Consumer Rates

S&P 500 Industry Group Snapshot

Industry Group

Daily %

Chg

-35.6% Chg % 1Yr +35.6%

Gas Utilities 2 2.0

Electric Utilities 1 1.6

Multi-Utilities 1 1.3

Construction Materials 1 1.2

Textiles & Apparel 1 1.2

Auto Components --3.3

Automobiles --3.1

Energy Equipment & Svcs --2.6

Trading Co's & Distr --1.9

Construction & Engineerng --1.8






 


10-yr note

Yield:

1.89%

Asia Pacific -29.6% +29.6%

S&P/ASX 200 INDEX 6698.36 -0.8

CSI 300 INDEX 3899.98 -0.1

HANG SENG INDEX 26571.46 -1.8

NIKKEI 225 23319.87 -0.9





15-Yr Fixed mtge

3.22%

Federal Funds

1.75%

YTD % Change

27.8%

Close

27,783.59





YTD % Change

19.1%

Bloomberg

Exchange-Traded
(Ticker) 1D % Chg$577 $1197
Coffee (COFF.L) 1.9
Copper (COPA.L) -0.6
Corn (CORN.L) 0.2
Cotton (COTN.L) -0.1
Crude Oil (CRUD.L) 0.2
Gasoline (UGAS.L) 0.7
Gold (BULL.L) 0.8
Natural Gas (NGAS.L) -2.0
Silver (SLVR.L) 1.0



 

Futures Close 1D % Chg
Copper 2.64 -0.2
Crude Oil 57.12 0.6
Gold 1463.30 0.7
Natural Gas 2.60 -0.8
Orange Juice 1.00 1.6

¬

Futures Close 1D % Chg

Silver 16.91 1.3

Sugar 12.85 2.1

Soybean 9.15 -0.2

Wheat 5.14 -1.5

Corn 3.75 -0.7

Europe -25.3% +25.3%

STXE 600 (EUR) Pr 405.86 -0.3

CAC 40 INDEX 5907.09 -0.2

DAX INDEX 13230.07 -0.4

FTSE 100 INDEX 7351.21 -0.2

1-Yr ARM

3.61%

Home Equity Loan Natl

6.33

Dow Jones 30 Industrials

Company Close

1D %

Chg

Chg %
3M
3M Co 170.55 -0.2 3.4
AmerExpCo 120.26 -0.5 -4.8
Apple Inc 264.47 1.0 26.6
Boeing 362.50 -0.1 8.9
Caterpillr 144.49 -1.3 21.4
Chevron 122.28 1.1 -0.1
Cisco Sys 48.46 0.2 -8.1
Coca-Cola 52.41 1.4 -2.0
Dow Inc 53.66 -2.7 14.5
ExxonMobil 68.80 -0.8 -2.4
Gldman Schs 219.32 -0.5 7.5
Home Depot 234.80 0.7 12.7
IBM 134.48 -0.8 -1.0
Intel Corp 57.89 -0.5 23.6
J&J 131.27 -0.1 -1.6

¬

Company Close

1D %

Chg

Chg %

3M

JPMorgan 128.48 -0.5 17.5

McDonald's 195.00 0.9 -11.3

Merck & Co 84.82 0.8 -1.5

Microsoft 147.31 0.2 6.3

NIKE Inc 91.29 2.0 9.6

Pfizer Inc 36.60 -1.0 4.0

Prcter& Gmbl 120.65 1.2 2.9

Travelers Cos I 134.13 0.6 -9.5

UnitedTech 148.31 -0.1 15.0

UntdHlthGr 253.57 -0.7 1.7

Verzn Comm 59.41 0.2 5.4

Visa Inc 179.41 -0.2 0.4

Walgreens 62.25 -0.7 17.3

Walmart 120.98 1.6 12.6

Walt Disney 148.72 7.3 8.5

Brazil R$

4.18

$1000 invested over 1 Month

  

 

BY THOMAS HEATH

President Trump often regards
the stock market as a reflection,
equating its extended bull run as
the ultimate affirmation. But the
same free-market levers that pow-
er Wall Street can also serve as a
moving referendum on his presi-
dency and all things Washington.
In an era where you can bet on
the name of the next royal baby or
whether Elvis is still alive, “predic-
tion markets” such as PredictIt are
positioning themselves as serious
forecasters of every conceivable
political outcome.
PredictIt is a current-events
stock exchange that poses hun-
dreds of questions — each its own
“market” — at any given time.
Users can plunk down as much as
$850 to tap the next justice to
leave the Supreme Court (Ruth
Bader Ginsburg at 73 percent),
forecast whether William P. Barr
will still be attorney general at
year’s end (91 percent say yes) or
envision a 2020 presidential run
by Dwayne “The Rock” Johnson (a
hard no at 96 percent).
Then there’s Trump, whose im-
peachment battle has dominated
the site. The odds of the Democrat-
run House of Representatives vot-
ing to impeach him stood at
78 percent Wednesday morning,
just ahead of the start of public
hearings; they’d been as high as
80 percent in October. The site
doesn’t see the Republican-held
Senate voting for conviction.
John Aristotle Phillips, the
Washington-based company’s co-
founder, contends that the very
nature of such platforms is a bet-
ter picture of what people are
thinking than what pollsters can
extract from statistics.
“When people have a little skin
in the game, they are more likely to
distill facts from fiction and dis-
count fake news,” he said. “The
theory here is that markets can be
effective at pricing future risk.”
An asset’s value is based on the
size of the trading pool. Traders,
much like their Wall Street breth-
ren, make wagers based on their
interpretation of news reports,
public statements and other fac-
tors that can affect performance.
Only one option can be correct,
and it’s winner-take-all.
Prediction markets seek to har-
ness the “wisdom of the crowds” —
the theory being that large groups
of people are collectively smarter
than experts and polls.
Though PredictIt’s spokesman
Will Jennings says it’s difficult to
make a “blanket accuracy assess-
ment, given the variety of mar-
kets,” he said the District-based
site’s handicappers are correct 70
to 80 percent of the time. It fore-
cast, for example, that Brett M.
Kavanaugh would be on the short -

list to succeed Justice Anthony M.

Kennedy on the Supreme Court. It

also signaled that Kavanaugh

would get the nomination hours

before it was formally announced.

Though research generally sup-

ports the idea that prediction mar-

kets are better forecasters than

polls, Justin Wolfers, a University

of Michigan professor who has

studied prediction markets, said

to take that with “a big asterisk.”

“Saying markets are better than

the alternative is not saying mar-

kets are perfect. Most ways of pre-

dicting the future are bad. It’s

possible markets are the least

bad.”

PredictIt was on the wrong side

of Brexit, when Britain invoked its

separation from the European

Union in a letter from then-Prime

Minister Theresa May. Nor did it

call Trump’s 2016 election victory;

it said Democratic rival Hillary

Clinton had a 95 percent chance of

winning Florida, for example, but

she didn’t. The site erroneously

gave Martha McSally a 92 percent

chance of winning Arizona’s 2018

U.S. Senate election. The former

Air Force pilot lost but was later

appointed to the other seat that

had been vacated by Sen. Jon Kyl.

PredictIt correctly anticipated

that the GOP would win the Sen-

ate and Democrats reclaim the

House in 2018 midterms, that Mil-

waukee would host the 2020 Dem-

ocratic convention, and that Boris

Johnson would lead Britain’s Con-

servative Party.

But Washington’s political

scene dominates the site, where

3,000 active traders are partici-

pating in markets every day.

PredictIt pegs Trump’s odds of

reelection at 42 percent, which

makes him the favorite one year

out. As the incumbent, Trump has

the historical advantage. Demo-

cratic Sen. Elizabeth Warren

(Mass.), meanwhile, has a 17 per-

cent chance, former vice president

Joe Biden is at 13 percent and

South Bend, Ind., Mayor Pete Butt-

igieg stands at 12 percent, accord-

ing to the website.

Trump made his own prediction

Tuesday during a speech at the

Economic Club of New York. He

told the business-friendly crowd

that they would vote for him.

“The truth is look, you have no

choice, because the people we are

running against are crazy,” he said

to laughter. “Okay? They are crazy.”

The Democratic presidential

debates generated a lot of interest,

especially after the Oct. 15 slug-

fest. PredictIt carried a number of

active markets during that debate

and continues to hold markets on

who fared the best. Traders fore-

cast that Bernie Sanders would get

the biggest bump in the polls and

that Biden would slide the most.

Though PredictIt comes across

as quiz show meets Caesars Palace

sportsbook, the five-year-old site

doesn’t have bookies and odds-

makers like the sports gambling

parlors that populate Las Vegas or

local racetracks. There are no “bet-

ting lines” like those found on the

Betfair Betting Exchange in Eu-

rope. And it’s not a traditional

pollster.

Rather, it’s a gambling-polling

hybrid that essentially asks people

to back up their political prognos-

tications with money.

“Polling asks you what you hope

will happen,” Phillips said. “In-

vesting in a market is what you

actually think will happen.”

PredictIt allows traders to make

predictions on future political

events by buying 1- to 99-cent

shares in binary outcomes. The re-

sulting share price can be read as

the probability of a specific event

occurring, based on the collective

intelligence of the market partici-

pants, according to the company.

The odds are set by the traders

and what they are willing to pay. If

a contract that pays $1 if “Candi-

date X” wins an election is cur-

rently priced at 53 cents, the mar-

ket says “Candidate X” has a

53 percent chance of winning and

47 percent chance that they will

lose.

PredictIt’s team formulates

questions that must have two

sides to the bet, known as a “con-

tract.” Only one option can be cor-

rect, and it’s $1, winner-take-all.

The staff gathers every Monday

to spitball what questions will be

irresistible to traders. Will Pope

Francis finish out his term? Will

2019 be the hottest year on record?

Which party will take crucial

swing state Ohio in next year’s

presidential contest?

Political consultant Pratik

Chougule is the author of the 2016

book “How to Make Money From

Political Predictions.” He agrees

that prediction markets are more

valuable than pundits, talking

heads and politicians when it

comes to discerning political out-

comes. But Chougule said Predict -

It has deep imperfections because

of a demographic dominated by

young, highly educated men. They

are predisposed, for example, to

gravitate to a presidential candi-

date such as Andrew Yang — a

successful entrepreneur who’s

polling at about 3 percent — as

opposed to lifetime politicians

such as Biden or Sanders.

“If markets are so rational, why

are they putting such a high likeli-

hood of Andrew Yang or Hillary

Clinton winning the Democratic

nomination,” Chougule said. “The

market is overstating their odds

because the people who are bet-

ting on political markets are not

anywhere near a random sample

of the population.”

Most of PredictIt’s 200,000 sub-

scribers are well-educated millen-

nial males from large cities on the

East and West coasts. They earn

$100,000 and $200,000 a year,

according to the company. Many

are employed in finance, law and

politics. Not surprisingly, a big

chunk of traders are in the fields of

economics, statistics and mathe-

matics.

Phillips, the company’s 63-year-

old co-founder, first made nation-

al news in the 1970s as the “A-

bomb Kid” when he designed an

atomic bomb for a seminar while

attending Princeton University.

The term paper elicited contact

from a Pakistani official looking

for the plans, sparked attention on

the floor of the U.S. Senate and led

to a book called “Mushroom: The

True Story of the A-Bomb Kid.”

Phillips later tried his hand at

politics, twice unsuccessfully run-

ning for a congressional seat in

Connecticut. During those cam-

paigns, he spotted a business op-

portunity to develop technology

around political fundraising and

election compliance. That led to

Aristotle, the company he co-

founded with his brother, Dean

Phillips, in 1983. Aristotle is the

parent of PredictIt.

“Aristotle was a happy byprod-

uct of my congressional cam-

paigns,” he said.

The brothers branched out into

political forecasting with Predict -

It in 2014 after teaming up with

Victoria University of Wellington,

New Zealand. Victoria University

created and operated the site that

Phillips introduced to the United

States.

“There are limitations on poll-

ing that can somewhat be ad-

dressed by something like a mar-

ket,” Phillips said. The question of

whether markets are more accu-

rate than polling has been the

subject of intense academic re-

search, and that is why Victoria

University was studying it.

The university received a letter

from the U.S. Commodity Futures

Trading Commission giving Pre-

dictIt permission to allow trading

on the site at a limit of $850 per

trade. The cap is designed to stop a

trader from skewing the prices by

flooding the bets with cash.

“Instead of trying to arrive at a

price of oil 12 months from now,

you are using the same market

forces to ascertain who is going to

win an election,” Phillips said.

The company makes money,

but not a ton, Phillips said. Its

revenue comes from a 10 percent

fee on the profit of any trade.

There is also a 5 percent fee when a

trader withdraws money from

their account. There is no charge

to open a PredictIt account or to

deposit funds.

Jason Hemmendinger, a soft-

ware engineer and top predictive

trader, has been trading since

June 2017, when he created a Pre-

dictIt account with $40. He said it

hit five figures after the 2018 mid-

terms.

“I have made some mistakes,

and I was below $5 at one point,

but I kept at it and rebounded,”

said Hemmendinger, who is prob-

ably more proficient in current

events than the average citizen.

Hemmendinger said his big-

gest PredictIt “gets” were predict-

ing that North Korea would par-

ticipate in the Olympics and that

Trump would meet with North

Korean leader Kim Jong Un. He

also guessed correctly that Sen.

Lisa Murkowski (Alaska) would

be the only Republican to oppose

Kavanaugh’s nomination.

“It’s arrogant to say, but I’m right

more often than I feel,” he said.

Hemmendinger checks dozens

of prices every day, and he some-

times spends hours on PredictIt.

He isn’t sure that the site is a great

prediction vehicle, but he enjoys

playing the game.

“Constraints on PredictIt’s

market structure, combined with

participants self-selecting, can

lead to distorted prices and there-

fore profitable plays,” Hemmend-

inger said. “You can even tell peo-

ple the correct play and they will

still throw their money away.”

[email protected]

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