investment insights
The race for the White House and its implications
Lombard Odier Private Bank
Key takeaways
- Joe Biden became the front-runner last week in the Democrat’s race to challenge President Trump
- Democrats face a choice between a return to more traditional politics under Mr Biden, or more radical reform with Bernie Sanders
- We expect further policy responses to the coronavirus from the Fed and other central banks, as well as from governments worldwide
- We remain overweight US Treasuries and believe that investors need to keep adequate instruments to manage the downside risks.
The race to challenge Donald Trump for the White House in November has narrowed. Joe Biden, vice president to Barack Obama for eight years, staged a political comeback last week by winning ten of the 14 state nominations decided on ‘Super Tuesday.’ That sets up Mr Biden as the Democratic leader in the contest, but may be the start of months of mudslinging.
Donald Trump, Joe Biden, Bernie Sanders. The choices for president before American voters in the months ahead have rarely been so politically diverse, despite all three main candidates being white men in their seventies.
Just a month ago, Mr Biden, who first made a presidential bid in 1987, placed fifth in the New Hampshire primaries on 11 February 2020 and found himself written-off as a Democratic contender. Last week, Mr Biden won six states by wider margins than forecast, as well as states such as Texas and Massachusetts that forecasters expected rivals to win. That gives Mr Biden 664 of the 1,991 state delegates needed to secure the nomination, compared with Mr Sanders’ 573. Another 352 delegates will be decided in a further six states on 10 March 2020.
Until Super Tuesday, so-called because the day sees one third of Democratic party delegates vote, senator Bernie Sanders led the field. Mr Sanders did win California, Colorado and Utah, plus his home state of Vermont. California’s size, with 415 delegates decided of which more than half were won by Mr Sanders, makes it likely that he will contest the nomination all the way to the Democrats’ July convention where the candidate is finalised.
The initially diverse field of Democrat candidates lost four campaigners last week when they withdrew from the race: Mike Bloomberg, Pete Buttigieg and Amy Klobuchar, all of whom have since endorsed Mr Biden. Mr Bloomberg’s resources and reiteration that his priority remains to unseat Mr Trump, will surely make a difference to Mr Biden, who did not spend a campaigning dime in the five states he won last week. Elizabeth Warren finished third in her home state of Massachusetts and, at the time of writing, had not endorsed either remaining candidate.
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