Oct 19: Trump endorses Netanyahu and Eisenkot drops 8, and Brazil's first debate

Cold open

Maya: Yesterday morning we told you the market gave Gadi Eisenkot fifty four percent to be Israel's next prime minister.

Daniel: Then Donald Trump posted. And by the evening, eight of those points were gone.

Maya: This is The Poly Brief. It's Monday, October nineteenth. I'm Maya.

Daniel: And I'm Daniel. Every day we take the biggest moves on Polymarket, show you where the odds stand, and ask: why is the market betting this way?

Maya: Today: one post that moved an election market. And Brazil, six days before the runoff, where the polls and the odds are telling two very different stories.

Story 1: Israel

Maya: The board. Who will be Israel's prime minister after the election on Tuesday, October twenty seventh? Gadi Eisenkot, forty six percent. Down eight points since yesterday.

Daniel: Benjamin Netanyahu, twenty nine and a half, up two. Naftali Bennett, twelve and a half. Forty eight and a half million dollars traded on this one.

Maya: So the whole climb we talked about yesterday...

Daniel: Gone. Eisenkot is right back where he was a week ago. We announced a monthly high, and the market took that as a dare.

Maya: OK, what happened?

Daniel: Sunday, on Truth Social, President Trump gave Netanyahu what he called his complete and total endorsement. He called him a great warrior prime minister. And in capital letters: Bibi Netanyahu will never let you down.

Daniel: And then this. Quote: if Israel has the wrong leader, which would be anyone other than Bibi, America will have to do this work ourselves, and I am not inclined to do so.

Maya: The work being Iran.

Daniel: Iran. Axios reports Trump had discussed a major new operation against Iran before the elections, and decided to wait until after them.

Maya: And the timing on the board?

Daniel: Axios had the story up by about six in the evening, Israel time. Eisenkot was at fifty four until around five. By about eight, forty eight. By a quarter to ten, forty four. Netanyahu jumped from twenty eight to thirty two in the same window.

Daniel: No article says that's why it moved. But the timing matches, and we couldn't find anything else that afternoon.

Maya: Did anyone see it coming?

Daniel: Not everyone. Earlier in the week Trump said, we haven't even thought about it. On Thursday he told Newsmax: I don't trust anybody. The Times of Israel says some analysts expected him not to endorse anyone.

Daniel: On Sunday he told Axios: I was always going to do that. I just didn't want to do it too soon.

Maya: So the suspense was part of the plan.

Maya: So why does the market buy it? Give me the reasons.

Daniel: Reason one: Iran. Trump tied his support for Israel's security to one name. Asked by Axios if he could work with another leader, he said: maybe I will, maybe I won't. Who wants to take the chance?

Daniel: Reason two: coalition math. The Forward argues the endorsement gives Netanyahu more reason not to step aside in a deadlock, and makes it harder for opposition parties to join a government he leads.

Daniel: Reason three: Sunday night's polls didn't give Eisenkot a clear answer. Kan, the public broadcaster, had his party Yashar first, twenty three to Likud's twenty one. Blocs: fifty two to fifty one for his side.

Daniel: But i24 News had Likud first, twenty five to twenty one, with Netanyahu's coalition at fifty seven. Both polls came out after the price had already dropped.

Maya: And how did the candidates react?

Daniel: Eisenkot said he has great appreciation for the US president, but Israel is a democracy, and its citizens decide. On Channel twelve he said he'd asked that there be no intervention in Israel's election.

Daniel: Bennett said he knows he can get along very well with President Trump. And Netanyahu, about seven minutes after the post: together we'll finish the task.

Maya: Now the other side. What could flip it back?

Daniel: First, the numbers are still close. Nobody reaches sixty one in either poll. And PBS, with AP, wrote that it was not immediately clear what impact the endorsement would have.

Daniel: Second, Trump isn't a one way bet in Israel. The Forward says he's still popular there, but has lost approval since the Iran ceasefire deal.

Daniel: Third, the fine print we talked about yesterday. This market only pays the person who's actually sworn in. A caretaker doesn't count. A deadlock with Netanyahu staying on as caretaker is still not a win for him here.

Daniel: And Ofer Winter's party, which says it would back Netanyahu, is below the threshold in both Sunday polls. Votes for a party that misses the threshold are simply lost.

Maya: What to watch. Friday is the last day polls can be published. There's still no debate scheduled, after Eisenkot challenged Netanyahu at the start of the month. Election day is Tuesday the twenty seventh, and we'll check who called it the next morning.

Maya: Bottom line: one post erased a week of gains. Whether it changes a single seat, we'll only know on the twenty seventh.

Daniel: And if you want the numbers before the next post drops, hit follow. It's free, and it takes less time than counting to sixty one.

Bridge

Maya: Daniel, last night my sister and her husband had a forty minute argument about the dishwasher.

Daniel: Forty minutes? About what?

Maya: Whether forks go in facing up or facing down.

Daniel: Facing down. Obviously.

Maya: See, that's exactly what he said. And then they both said the other one was making things up.

Daniel: Did anyone win?

Maya: Nobody won. But at least it wasn't on live TV. Unlike two people in São Paulo last night.

Story 2: Brazil

Maya: Story two. The board. Brazil's presidential runoff, this Sunday, October twenty fifth. Flávio Bolsonaro, seventy nine percent. Lula, twenty and a half.

Daniel: Lula is up eight points in a week. A week ago he was at twelve and a half. And about a hundred and eighty eight million dollars have traded on this market.

Maya: We've been on this one since the first round. What did we say?

Daniel: On October fifth, eighty two for Flávio. On the ninth, almost eighty six. Friday, seventy nine. A month ago, before the first round, it was fifty seven to forty two and a half.

Maya: And the polls?

Daniel: Close. Poder360 counted thirteen national polls. Flávio is ahead in eleven, Lula in one, and one is a tie. But ahead by how much? In most of them, one to three points in valid votes.

Daniel: And the gap is shrinking. PoderData went from fifty three to forty seven, to fifty one to forty nine, to fifty fifty. Ipespe: the gap went from five point four points to two point four. Vox Brasil, released Sunday, has Lula ahead, fifty one to forty nine. It's the only one.

Maya: So the polls say coin flip, and the market says seventy nine. Why?

Daniel: Reason one: the first round. The last Datafolha before the vote had Lula at forty two, Flávio at forty. And it was Flávio who came in first, forty seven to forty five. On election night his odds jumped from about sixty to eighty four.

Daniel: Reason two: twenty twenty two. According to Congresso em Foco, all six final polls that year had Jair Bolsonaro too low. Datafolha had him at thirty six on the eve of the first round. He got forty three.

Maya: So the market is basically adding a polling error to every poll.

Daniel: Pretty much. Reason three: Flávio still leads in eleven of thirteen. Close, but it's the same direction almost every time.

Maya: And the debate last night?

Daniel: Their first ever head to head. On Band, in São Paulo. They never debated in the first round. Last week Flávio said he wouldn't go, then changed his mind a day later, after Lula confirmed.

Daniel: It got personal. Lula said Flávio's nice little face is the face of a hustler from Rio, who pretends and lies shamelessly. Flávio promised a huge cut on what he called the corruption of Lula's government, and accused him of reckless spending.

Daniel: And Lula told him: your father can vote for me, he knows I'm better than you. Flávio answered that his father can't vote, because of what he called political persecution.

Maya: Well. Nobody argued about the forks.

Daniel: And the market barely blinked. Lula's price ended the debate about where it started. There's no poll yet on who won.

Maya: The other side. What keeps Lula alive at twenty?

Daniel: Turnout. In the first round, more than thirty three million Brazilians didn't vote, twenty one percent of the electorate, the highest for a first round since 1998. Lula's campaign is going after them, starting with the Northeast, his base.

Daniel: And the trend. Several pollsters show the gap closing week after week. Vox has the two of them tied on rejection, at about forty five percent each.

Daniel: Brazil's financial markets are watching too. Last week the Ibovespa fell almost two percent and the dollar rose almost two percent against the real, as the polls tightened. One trader called it the election trade.

Maya: What to watch. A new AtlasIntel poll is expected today. Quaest, for Globo, around Thursday. The final debate on Globo on Friday night. And on Sunday, the polls close at five in the afternoon in Brasília. That's ten at night in Israel, after the clocks go back. The count usually ends the same night, and we'll see who called it next Monday.

Maya: Bottom line: the polls are a coin flip. The market remembers the last two times the polls were wrong, and in both, they were wrong in the same direction.

Close

Maya: That's The Poly Brief for today. Every article and number is linked in the description.

Daniel: And a reminder: these odds are prices, not prophecies. Nothing here is investment advice. Flávio at seventy nine means that about one time in five, Lula wins.

Maya: If you enjoyed it, follow or subscribe, leave us a rating, and send it to the friend who'll argue with you about the forks.

Daniel: We're here every morning. See you tomorrow!