The first crack in the Trump trades occurred after the only debate between the two presidential candidates last month, when Harris comprehensively outshone Trump.

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As the campaign intensified, however, Trump retained a solid advantage in polls and betting markets. At the start of this month, Polymarket had Trump with a 66.6 per cent chance of winning against Harris’ 33.5 per cent. PredictIt’s odds were 55 to 48 in Trump’s favour.

Even as the polls showed a tight contest, the Trump trade remained largely intact.

Then, last weekend, a single poll taken within Iowa shook up the markets. The Des Moines Register/Mediacom poll, which has a track record of accuracy, showed Harris with a 47 per cent to 44 per cent lead over Trump in a state he won by 9 percentage points in 2016, and 8 percentage points in 2020.

Another poll of likely voters released at the weekend, the ABC News/Ipsos poll, showed Harris with a 49 per cent to 46 per cent lead nationally, while a New York Times/Siena poll showed Harris leading in four of the seven swing states, with two tied and the margins for all seven within the poll’s margin for error.

Considering that what was once a one-way bet has developed into a nail-biting finish and an even-money bet – or even one where Harris has a marginal edge – it isn’t surprising that the Trump trade has unravelled.

The betting markets have gone in different directions. Polymarket (where the betting typically tends to favour Republicans) still has Trump comfortably in front, with a 59.3 per cent chance of winning. PredictIt now has Harris marginally in front, 54 per cent to Trump’s 53 per cent.

Wall Street edged down on Monday, bond yields fell, the US dollar, measured against a basket of its major trading partners’ currencies, weakened and Bitcoin was down 1.4 per cent. Bitcoin is now down more than 6 per cent since the start of this month.

Private prison operators Geo Group and Core Civic were down almost 2 per cent and 1 per cent, respectively. Both stocks have fallen around 10 per cent since the start of the month.

Trump Media shares bounced on Monday to close at $US34.34, a 12.4 per cent gain. A week ago, however, they were trading above $US51 a share. The company has lost $US3.4 billion ($5.2 billion) in market value in the week, with Trump shedding almost $US2 billion in paper wealth.

Trump Media might be a good barometer of Trump’s perceived chances of regaining the presidency, but its fate looks dim if he doesn’t deliver.

The company is still valued at $US6.87 billion but, if Trump’s chance for another term evaporates, it would be hard to justify that valuation, or anything remotely approaching it, for a company that had only $US836,900 of revenue and lost $US16.4 million in the June quarter.

The “Magnificent Seven” big tech stocks have been broadly tracking Trump’s political fortunes for much of this year. An index of those stocks fell nearly 1 per cent on Monday.

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Tesla is one of those seven stocks and probably, next to Trump Media, the best single stock trade on a Trump victory, given Elon Musk’s prominence in Trump’s campaign (and his financial contributions) and the prospect of Musk having an extraordinarily influential and broad role in a new Trump administration.

Musk has been tasked, should Trump win, to lead an audit of the government’s finances to identify cuts to spending. Musk says he could cut $US2 trillion, or almost a third of the government’s spending.

Given that the value and prospects of Tesla are, along with Musk’s other companies, heavily influenced by regulation and policy, Musk in the White House would be an invaluable asset for the company.

Tesla shares were, however, down 2.5 per cent on Monday and have slumped nearly 10 per cent in just over a week.

The Mexican peso and China’s yuan, which had been weakening when Trump seemed destined to win and launch his trade wars against everyone and China in particular, strengthened against the US dollar on Monday despite Trump’s latest threat to impose tariffs as high as 100 per cent on Mexico until it closed its border with the US.

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If there are Harris trades, they’re more on the other side of a Trump trade than a clear punt on Harris.

Where Trump would cut taxes for companies and the wealthy, she would increase them, and where his policies might be good for the big tech stocks and their shareholders (excluding, perhaps, Jeff Bezos’ Amazon) hers might be regarded as unfavourable.

Harris’ key policies involve the redistribution of wealth. The winners are more likely to be low-income households and small businesses rather than listed entities, so it is harder to identify obvious trades that aren’t just bets against Trump.

Trump clearly isn’t yet out of the race, and it may take days or even weeks to decide who gets sworn in as president on January 20.

It makes sense, however, for investors to either take profits or hedge their bets given how tight the once seemingly one-sided contest has become. That’s what seems to have been occurring.

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