Goldman Says Market Volatility Too Low as Sanders Rises in Polls
Goldman Says Market Volatility Too Low as Sanders Rises in Polls
(Bloomberg) -- Investors unnerved by Elizabeth Warren’s rising poll numbers last year seem remarkably blase at the rising prospects for Bernie Sanders, according to Goldman Sachs Group Inc.’s global head of market strategies.
“The market thinks that his ability to win against Trump is significantly lower than Warren’s ability to win against Trump -- even though there is nothing in the actual polls that would tell you that is right,” said Goldman’s Brian Friedman. The outcome is “as unknown and uncertain as ever. Vol is just too low.”
Warren and Sanders are two of the top-tier candidates vying to become the Democratic party’s nominee to run against Trump in November. When Warren’s odds on betting site PredictIt hit a peak of 52% back in October, some on Wall Street were gripped by fears about the Massachusetts senator’s perceived anti-business policy platform.
Warren’s chances have since crashed to under 10%. Sanders, a senator from Vermont, has seen surging odds, but there’s been no similar wave of concern among investors -- despite the potential that his policies would be to the left of Warren’s, Friedman said at a briefing in Sydney Wednesday.
Investors overall are telling Goldman they strongly expect Trump to win re-election, given a solid economy and the advantage of incumbency, Friedman said. Even so, his narrow margins of victory in rust-belt states in 2016 suggests the potential for surprises, he said.
Sanders rose to 21% support among Democrats and those who lean Democratic in the latest Quinnipiac University national poll, behind former Vice President Joe Biden at 26% and ahead of Warren on 15%.
“The people who control money in New York, L.A. or London -- they just have this opinion that’s really unfounded by the polling data in the states that will ultimately decide the election,” Friedman said.
Former New York City Mayor Michael Bloomberg placed fourth in the Quinnipiac survey, with 8%. He is the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News.
To contact the reporters on this story: Garfield Reynolds in Sydney at greynolds1@bloomberg.net;Adam Haigh in Sydney at ahaigh1@bloomberg.net
To contact the editors responsible for this story: Mark Cudmore at mcudmore8@bloomberg.net, Christopher Anstey, Cormac Mullen
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