Joe Biden’s Super Tuesday

One US territory and 14 states voted to choose the Democratic presidential nominee that will face Donald Trump for November’s presidential election. While the full results of the so-called Super Tuesday on 3 March are not yet known, former vice president Joe Biden now appears to have the most delegates.

Building off momentum on his victory in South Carolina late February, and benefiting from the withdrawal of mayor Pete Buttigieg and senator Amy Klobuchar (both of whom endorsed him ahead of Super Tuesday), Joe Biden won 10 out of 14 states, including all states in the south.

With counting still ongoing in several states, notably in California where 415 pledged delegates are up for grab, the final impact is still being determined. While there are many states to come, many press and pundits, along with the betting odds, are suggesting that the former vice president is the front-runner for the Democratic presidential nomination ahead of senator Bernie Sanders. He also could benefit from the former mayor Mike Bloomberg’s decision to leave the race and endorse him.

That said, with 1991 pledged delegates needed to win the nomination at the Democratic National Convention on 13 July, there is still a long way to go. Next Tuesday, on 10 March, six states vote to allocate 352 delegates. And then on 17 March, Florida, Illinois, Ohio and Arizona will be voting, distributing 577 delegates.

By then, a majority of the 3,979 delegates will have been allocated, and it could be clearer whether Biden or Sanders can win a majority come the convention, in what is quickly becoming a two-horse race likely to last until July. If not, the risk of a contested convention increases and this scenario could create some volatility.

Less volatility for financial markets

While markets are focusing on the Covid-19 outbreak for the time being, the US election is an important medium-term event for financial markets.

It is too early to draw any conclusion from the Democratic primaries process, but the market seems to have reacted well to the resurgence of Biden, who is perceived as more moderate than Sanders, whose progressive views and policy positions could mean more uncertainty in the US. It follows that prospect of a presidential contest between Trump and Biden could mean less volatility and market reaction, but it remains early in the contest and there is also daylight between President Trump and former vice president Biden in their own views on certain key issues.

One point to keep in mind: regardless of whoever wins the election, the president come 2021 may have to deal with a divided Congress. This outcome could impact the ability to implement swift changes on the domestic stage.

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