GIULIETTA TALEVI: Sports betting locked down? No problem — welcome to the stock market

If you’ve ever thought that buying and selling shares is just a skip away from landing on red or black at the roulette wheel, this read will probably do little to disprove that view.

Denied their sports-betting fix since all sporting events were cancelled in the wake of Covid-19, punters who would have gambled on the outcome of an NBA basketball play-off, say, have instead turned to the biggest casino of them all: the US stock market.

“Brokerages that connect everyday investors to the stock market have seen a surge in account openings, as punters seek thrills in unfamiliar places,” writes Richard Henderson. “This has brought new investors to the market, helping to propel a one-third rise in US stocks from the depths of the pandemic sell-off in March.”

These aren’t wide-eyed greenhorns, either. “I’m not here for the long run,” says one such punter, Daniel Goodwin, whose day job involves overseeing a team of paralegals for a law firm in Indiana. “I just want to throw a thousand bucks at something to see if I can make a few hundred.” (In no small irony, Goodwin revealed that he’d done well investing in two casino groups, MGM Resorts and Caesars Entertainment).

Of course, some days it feels like a daily roll of the dice where your number comes up sweet, while on other days your pair of twos is easily trumped by Mr Market’s straight flush.

Take Monday’s mad surge: the merest whiff of a successful vaccine trial from US company Moderna, and the market was off to the races – the S&P 500 closed 3.2% higher while Moderna itself galloped 20% ahead.

Yet just a day later, a report from health news website STAT comprehensively dismantled the frenzy that accomplished a statement by Moderna that its “positive” phase one test of eight volunteers had produced coronavirus antibodies. Unsurprisingly, the market turned tail.

As Bloomberg’s John Authers writes here: “markets run on narratives,” and “with so much uncertainty around the coronavirus, we have a tendency to fall back on those that play to our greatest hopes and fears”.

That whipsaw binary division of all-or-nothing, right-or-wrong, lockdown or open-the-economy-NOW is equally reflected in the political divisions that have sprung up around balancing acts by governments: protecting the health of their citizens against keeping their economies from collapse.

Increasingly, it’s becoming an either-or debate, and, apparently, an argument of the right or the left. The narrative says that it’s the poor, working class and left wing who want the lockdown to continue; while the rich, white and right wing is eager to sacrifice lives for the economy.

In The New York Times, columnist Thomas B Edsall writes that “the partisan fight over the lockdown has shown us, once again, how differently the choices [that] government leaders make look to different constituencies of our society. Whether you emphasize the imperative to save lives or the consequences of economic devastation … determines what you think the proper response to the outbreak should be, to a degree that is astonishing even in our deeply polarized society.”

And the divergence is growing, everywhere.

This article from the FT on how Spain’s “polarised political tribes” are squabbling over the lockdown strikes a similar chord. “This government has to resign now,” says Carrillo de Albornoz, an interior designer. “They are governing by decree, and you can’t govern a country by decree.”

Sound familiar, doesn’t it?

*Talevi is the FM's Money & Investing editor.

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