US election: Sanders campaign less certain as moderate field narrows

It’s very early days in the primary season as the Democratic party nominates a leader to go head-to-head with Trump in the November election. Only four states have voted so far, but this week on Super Tuesday, over 30% of delegates are up for grabs. The race is about to heat up.

Former Vice President Joe Biden’s campaign had been dwindling amongst a crowded moderate field. Bloomberg was gaining traction on a huge ad spend, Buttigieg and Klobuchar beat expectations in Iowa and New Hampshire, and Steyer was polling well in South Carolina. That all changed on Saturday when Biden swept almost 50% of votes in the South Carolina primary. His strength among African American voters has held strong and the former VP is back in the race.

Voters go into Super Tuesday - the biggest day of the primaries - with Biden’s victory fresh in their minds. Not to mention a narrower moderate field after Pete Buttigieg, Amy Klobuchar, and Tom Steyer dropped out of the race. Buttigieg and Klobuchar endorsed Biden on their exit, making him a real contender once again.

Because candidates are required to obtain 15% of a state’s vote in order to obtain any delegates, the crowded moderate field was working in Sanders’ favour. The moderates were outcompeting each other, while Sanders was a clear favourite for the less-crowded progressive vote. It might now be time for Biden to bounce back, and betting markets suggest this might be the case, with Biden’s odds once again exceeding 30%.

Sanders remains the frontrunner according to PredictIt markets, but Biden’s chances are improving. As the party rallies behind Biden, his chances should rise considerably.

Source: Bloomberg

Markets will prefer the prospect of a Biden nomination, who is considerably more market friendly than Sanders. He also wants to continue the work of the Obama administration, during which he served as Vice President. Markets like familiarity and because a Biden administration is fairly predictable, we would expect less election-induced volatility if Biden were to win the nomination instead of Sanders.