Even before the first vote was cast in Iowa, we were encouraging investors not to read too much into the early primary contests (see blog post here) and instead to pay attention to the March primaries. After all, a crowded field, a front-loaded calendar with delegate-rich states, the lack of any winner-take-all states, and the unknown of a Mike Bloomberg candidacy all underscored that this would likely be a protracted nominating race where some of the old norms would not necessarily apply.
Fast-forward a month, and the race has transformed with dizzying speed. In less than a week, the crowded field of moderate Democrats has winnowed and consolidated around Vice President Joe Biden, making it a two-person race between Biden and Senator Bernie Sanders.
Momentum matters – and it can shift rapidly
What to look out for next? Momentum in politics is important, and Joe Biden leaves Super Tuesday as the front-runner with a lot of it (Joementum?). He dominated in states where he was expected to do well, surprised in states where he was not, and even won Massachusetts – the home state of Elizabeth Warren – after not campaigning there. His support was broad and deep and looked quite similar to the “Obama coalition,” which helped elect President Obama twice and would likely make Biden a formidable opponent to President Trump in a general election should he win the nomination.
Note, however, that votes in California are still being counted, and while momentum is important and the path to the nomination for Biden is clear, a lot could still happen. The contests on 10 March, which count for 9% of total delegates, are important, particularly in states like Michigan and Washington where Sanders has had a comfortable lead; losing those states could be a negative harbinger for Sanders’ candidacy. Similarly, the stakes for the debate on 15 March are particularly high for Biden as he will have to reassure many Democratic voters that the second look they are giving him is justified, while defending himself from incoming attacks from Sanders.
After that, the Florida primary on 17 March (6% of total delegates) and Georgia on 24 March (3%) could be decisive for Biden. These states’ demographics skew older (Florida) and more African American (Georgia), two constituencies who are generally supportive of Biden, so if he sustains his current momentum for these contests, he could potentially sew up the nomination by late March or April.
Brokered convention less likely, but possible
The other plausible scenario, however, is that Sanders has a South-Carolina-like revival and is able to amass enough delegates to deprive Biden of a simple majority, potentially forcing a brokered or contested Democratic Convention in July. Under this scenario, pledged delegates become effectively free agents, superdelegates (party insiders and elected officials) are able to vote, and some strange things can happen to determine the nomination. With that said, we are far away from that, and the events of the past week – in particular Biden’s dominance on Super Tuesday – has made a contested outcome less likely, and at this point, the Democratic nomination is his to lose.
Senate and House races matter, too
With all the attention on the race for the White House, it’s important for investors to remember that Congress is critical as well – and its composition could change after the November election. Whether there is a Democrat or a Republican in the White House, the president needs a cooperative Congress to advance any legislative agenda, such as health care, tax, or spending policy. While control of the House of Representatives seems less likely to change, investors should pay attention to Senate races in Maine, Arizona, Colorado, and Alabama as they may very well determine which party controls the Senate – and accordingly, the legislative agenda as well.
For more insight into the Democratic nomination process and the key implications of the U.S. election, please watch “Super Tuesday: What Happened, What’s Next.”
Libby Cantrill is PIMCO’s head of public policy and a regular contributor to the PIMCO Blog.