It's clear: Newt Gingrich's odds have risen at the expense of Mitt Romney's. Romney has finally fallen from his peak at about 70% and now stands at 57.0%. This is the first time Romney's odds have moved downward since the rise of Rick Perry in August. The Intrade investors never bought into the Herman Cain mania that swept the primary for about a month. But they're taking Gingrich more seriously.
Gingrich has risen to 21.1%, up from about 14% two weeks ago. A few weeks before that, Gingrich was in the low single-digits. It's worth noting that despite Gingrich's lead in the national polls, the Intrade market still has Gingrich a nearly 3:1 underdog in the race. Thus, they're following the polls, but they're taking them with a grain of salt. But unlike Cain, they think Gingrich has a real chance to win.
Meanwhile, the rest of the field is in the low single-digits. Ron Paul and Jon Huntsman each rose from 3-something percent to about 5.5%, apparently reflecting what investors perceived as good debate performances. No other candidate has climbed beyond 3%.
Where is Gingrich getting his strength in the early states? The Intrade market on the Iowa Caucus has Gingrich ahead of Romney, 35% to 25%. New Hampshire is still overwhelmingly Romney territory with 77%; Gingrich is at 12%. South Carolina has Gingrich and Romney nearly tied at 35%, but Florida has Romney the favorite at 50% to 24%.
Overall, the investors believe Iowa is a close race, with the edge going to Gingrich. New Hampshire is Romney's firewall, making him the only candidate guaranteed to win one of the early primaries. They have South Carolina at a push, perhaps hedging because there's been little polling there. Florida, which is sort of a tie-breaker, leans toward Romney as the overall odds for the nomination do.
