When the news broke on Oct. 28 about a new FBI investigation into emails pertaining to Hillary Clinton, millions wondered how it would affect the US presidential race. The forecasting site Predictwise had a quick answer. It dropped the odds of Clinton winning by about 5 percentage points.
Before the FBI news, Predictwise pegged the odds of Clinton winning at 91%, based on an algorithm that analyzes a variety of factors in real time. Within an hour or so of the FBI revelation, the odds had dropped to 86%. It would still be days before polls would be able to survey voters and gauge the damage done to Clinton’s campaign.
Unlike polls, which are one-time surveys of voters, usually by phone, Predictwise forecasts function like a stock index that continually digests new data. Inputs include some polling data, but “it really focuses in on market data,” Predictwise founder David Rothschild tells Yahoo Finance in the video above. “It’s really focusing on contracts around the world where people are buying and selling on who’s going to win the elections.”
It might sound surprising that bettors around the world make wagers on the outcomes of US elections. Yet markets such as Betfair, PredictIt and Hypermind all generate data on real-world bets on political winners and losers. Predictwise crunches those numbers and other data to generate its election odds. Such “market data” is at least as accurate as polls at predicting winners. And it’s available much more quickly.
The damage to Clinton from the FBI news is less dramatic than what Trump suffered when the notorious Access Hollywood featuring Billy Bush became public. “When the Access Hollywood tape hit, Hilly Clinton moved up 5 percentage points within a few minutes,” Rothschild says. She gained a few more points over the following days. “The markets have done a very good job of incorporating shock events very quickly.”
Predictwise currently gives Clinton, the Democratic nominee, an 87% chance of winning the White House on Nov. 8. Republican Donald Trump has a 13% chance. So Clinton has rebounded by one point since last week’s FBI revelations. Other sites think Trump has a better chance. One Las Vegas betting site says Clinton’s odds are just 67%, with Trump a 1-in-3 underdog. FiveThirtyEight puts Clinton’s odds at 78.8% and Trump’s at 21.1%. The New York Times Upshot prediction tool gives Clinton a 90% chance of winning—but that forecast is based on older polls that may not yet reflect voters’ views on the new FBI email probe.
Predictwise puts the odds of Democrats taking the Senate at 69%, but gives them just a 9% chance of winning the House. So the overall forecast is for another two years of divided government, at least. Seems like a safe bet.
Rick Newman is the author of four books, including Rebounders: How Winners Pivot from Setback to Success. Follow him on Twitter: @rickjnewman.