State of election markets: 303 Days

In just a few more weeks, after just 200+ days of serious campaigning, the first votes of the 2016 election will be cast in Iowa for both the Republican and Democratic Caucus. The Republican Iowa favorite, Ted Cruz, is jockeying with his good friend Donald Trump for the non-establishment votes. The winner of that battle will square off against Marco Rubio (most likely) or Jeb Bush, coming out of the establishment camp. That picture has not changed that much over the last week. With Rubio still the most likely, but the combined weight of Cruz and Trump crossing just over 50%. On the Democratic side, Hillary Clinton has lost a little steam against Bernie Sanders, but is still really likely to hold on and win.

The most likely scenario for the first two primary elections is Cruz winning Iowa and Trump winning New Hampshire. Currently, Rubio is favored to come in third and second in those two contests. If Cruz and Trump split the first two contests they will certainty both stay in the election. If one of the candidates is able to beat the other in both locations, a really long-shot, than the loser would likely drop. On the establishment side, Rubio is favored to be top establishment candidate (third and second in Iowa and New Hampshire respectively). If that holds, the other establishment candidates may drop, but will certainly cede much of their support.

This is where Rubio's advantage lies; it is likely that the establishment will consolidate before the non-establishment. Trump is now attacking Cruz on his birthplace. Cruz is running to the right of Trump on immigration and foreign policy. He is already to right of Trump on economic policy; Trump's tax plan is incredibly regressive, but Cruz's much more extreme. If Rubio can emerge from Iowa and New Hampshire as the clear establishment choice, he would bask in the love of the establishment endorsements, as Trump and Cruz cautiously step up their attacks on each other. Of course, this is just the most likely scenario!

PredictWise20160110a
Vertical Lines: Nothing interesting this week!
Sources: Betfair, Hypermind, PredictIt, http://twopointoh.predictwise.com/politics/2016-president-republican-nomination/

Clinton is losing her a lead over Sanders as it becomes increasingly likely she will lose New Hampshire. A decisive win in Iowa could help her take New Hampshire and end the primary, but Sanders continues to look strong in his neighboring state. That being said, Clinton has a huge advantage overall and is still about 90% to get the nomination.

PredictWise20160110b

Vertical Lines: Nothing interesting this week!
Sources: Betfair, Hypermind, PredictIt, http://twopointoh.predictwise.com/politics/2016-president-democratic-nomination/.