The Hedgeye Election Indicator (HEI), a proprietary metric that uses real-time market and economic data to determine the probability of President Obama’s reelection chances, debuts today with a 116.9 reading, which equates to 58.4% chance that President Obama would win the US Presidential election if it were held today.
Hedgeye Risk Management, one of the leading independents research firms on Wall Street, developed the HEI over the past year to understand the relationship between key market and economic data and the US Presidential Election. We will release the HEI every Tuesday at 7 a.m. ET, beginning today all the way until election day Tuesday November 6.
After rigorous back testing, Hedgeye has determined that there are a short list of real time market-based indicators, for example, like the relative strength of the US Dollar versus a basket of selected international currencies, that move ahead of President Obama’s position in conventional polls or other measures of sentiment. Based on our analysis, market prices will adjust in real-time ahead of economic conditions, which will ultimately shape voters’ perception of the Obama Presidency, the Republican candidates and influence the probability of an Obama reelection.
The model assumes that the Presidential election would be held today against any Republican candidate. Our model is indifferent toward who the Republican candidate is as the sentiment for Obama and for any Republican opponent is imputed in the market prices that determine the HEI. The Hedgeye Election Indicator is based on a scale of 0 – 200, with 100 equating to a 50% probability that President Obama would win or lose if the election were held today.