Billionaire investor says a ' rally' is powering markets to record highs trends now

Billionaire investor says a ' rally' is powering markets to record highs trends now
Billionaire investor says a 'Trump rally' is powering markets to record highs trends now

Billionaire investor says a 'Trump rally' is powering markets to record highs trends now

Earlier this week, former President Donald Trump tried to take credit for booming stock markets.

And maybe he is right.

Billionaire investor Scott Bessent, a former Soros Fund Management chief, says rising markets are being fueled by polls that show the former president can beat Joe Biden in November's election.

'We believe that equity markets are in the midst of a "Trump Rally" that will last as long as he remains ahead of Biden in the polls,' he wrote Wednesday to investors in his Key Square Capital Management fund.

Trump is the clear frontrunner to claim the Republican nomination.

And a string of national polls suggests he leads Biden in their head-to-head matchups.

The top graph shows S&P 500 returns when Donald Trump has a poll lead in red, and the blue line shows the flatter growth when Joe Biden is ahead in the national polls. The lower graph shows a measure of Trump's poll lead in red and Biden's poll lead in blue

The top graph shows S&P 500 returns when Donald Trump has a poll lead in red, and the blue line shows the flatter growth when Joe Biden is ahead in the national polls. The lower graph shows a measure of Trump's poll lead in red and Biden's poll lead in blue

On Monday, former President Donald Trump took credit for record stock markets

On Monday, former President Donald Trump took credit for record stock markets 

That coincided with the S&P 500 hitting a record high in the middle of last month.

Bessent concludes that it was driven by traders with one eye on a future Trump administration that would renew his tax cuts along with other market-friendly policies.

And he illustrated his analysis with a graph produced by Renaissance Macro that showed cumulative returns when Trump was ahead in the polls far outpacing returns when Biden led. 

'We strongly believe that a significant impetus for the recent rally in equity markets is the commanding lead that he holds over President Biden in early polling on both a national basis and in the key battleground states,' he wrote.

'Liquid asset markets are priced on future probabilities—earning projections,

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