Election 2020: Bloomberg Is The Only Democrat Who Can Beat Trump, Analysis Reveals

Investors in U.S. asset markets are predicting former New York mayor Mike Bloomberg has the highest chance among Democrats of beating president Donald Trump in November -- but only if nominated by Democrats -- and those are long-shot odds.

Bloomberg's nomination probability is currently running just over 10 percent, said British multinational banking and financial services company Standard Chartered PLC in an FX Alert analysis about betting-market data. Former vice president and nomination frontrunner Joe Biden lags behind Bloomberg in terms of his conditional electability (meaning his odds are conditional on winning the nomination). Sen. Bernie Sanders (I-VT) might be slightly behind Biden. Sen. Elizabeth Warren (D-MA) and former mayor Pete Buttigieg have relatively low odds of beating Trump, if nominated.

On the other hand, 99 percent of the asset market investors affirm Trump remains the overwhelming favorite to get the Republican nomination. Markets are also pricing in a 55 percent to 60 percent chance Trump will win re-election if nominated -- a percentage ahead of all the Democrats.

Investors believe Bloomberg and Biden are the most asset-market friendly among the Democratic candidates. This indicates their greater implied electability might be why U.S. assets aren't showing more stress. Asset markets suggest the most electable Democrats are the most moderate.

The report also indicates asset markets might respond sharply if a more progressive candidate such as Sanders rises in electability. Analysts speculate financial markets might plunge if one of the race’s progressives goes on to win the Democratic Party's presidential nomination.

“Among investors, Bloomberg and Biden are probably viewed as the most asset-market friendly among the Democratic candidates, so their greater implied electability may be why U.S. assets are not showing more stress,” wrote the Standard Chartered researchers.

The researchers cautioned it's still too early for markets to be affected by the 2020 race. They also pointed out investors may believe candidates could face trouble enacting their agendas if elected. They did point out online betting markets have drawbacks.

“We use online markets but are mindful of their limitations,” said the researchers. “The views expressed though the markets may be wrong (just as polls often are) and the probabilities they generate may not be reliable if the markets are relatively thin.”

Asset markets consist of equities (or stocks), cash and cash equivalents, real estate, fixed income (bonds), commodities, futures and other financial derivatives.