On April 4 the probabilities were 81% for Ted Cruz to win the most votes over Donald Trump and John Kasich in the Republican Wisconsin primary, and 88% for Bernie Sanders to win the most votes over Hillary Clinton in the Democratic Wisconsin primary. At the same time, Trump was 89% to win New York, the next primary on April 19, and 54% to win the Republican nomination. And, Clinton was 71% to win New York and 88% to win the Democratic nomination.

While Cruz and Sanders’ wins were expected, their margins were slightly larger than expected. Going into Election Day the markets also predicted margin of victory. On the Republican side the markets were about 50% that Cruz would win by 8 percentage points or more, and on the Democratic side it was about 60% that Sanders would win by 5 percentage points or more. Both candidates will win by over 10 percentage points.

Cruz’ slightly stronger than expected victory affected Trump’s probability of winning the Republican nomination; he fell from 54% to 48%. If that number still seems high for someone who just lost Wisconsin in a landslide, post-Wisconsin Trump is still favored in New York at 89% and he is still the favorite in every primary the following week on April 26: Connecticut, Delaware, Maryland, Pennsylvania, and Rhode Island.

Figure1.20160405

Caption:  Probability of Republican Nomination

Data: Betfair, Hypermind, PredictIt, and assorted Bookies; Figure from PredictWise

Markets also help us dissect what winning could look like for Trump or any of the Republican field. Trump is 18% to get 1,237 pledged delegates, enough to win the nomination automatically on the first ballot. And, he is 25% to win the nomination on the first ballot with a mixture of pledged and unbounded delegates. That means he is just 23% to win the nomination on the second ballot or more.

As no one other than Trump can win on the first ballot, another way to look at those numbers is that Cruz is 45%, Trump 30%, Kasich 13%, Ryan 10% to win, conditional on a second ballot (which is 75% percent likely to happen). Of course, Kasich and Ryan are only eligible to win, if the rules committee changes the rules to let in candidates that have not won the majority of delegates in eight or more contests; Cruz is fighting really hard to keep that rule in place.

The Democratic nomination also moved a little, on the strength of Sanders’ stronger than expected showing. Clinton dropped from 88% to 86% to win the nomination. Like Trump, Clinton is expected to go on a tear following a rough patch of states. She is still 76% to win New York on April 19, and expected to sweep the five April 26 elections.

Figure2.20160405

Caption:  Probability of Democratic Nomination

Data: Betfair, Hypermind, PredictIt, and assorted Bookies; Figure from PredictWise

There is one more probability that matters, in many ways it is the only probability that matters: the likelihood of the eventual Democratic nominee beating the eventual Republican nominee in the general election. This number has held incredibly steady at 71-2% since March 16. This may seem surprising considering that Trump has fallen from 80% to 48% percent likely to be the nominee and Cruz has risen from just 11% to 33%. But, prior to his recent troubles, the market viewed Cruz as slightly less likely to win the general election, conditional on winning the Republican nomination; that is now equalized as Trump’s general election prospects would dampen if he limps into the nomination. Thus, swapping Cruz for Trump does not improve the Republican Party’s chances of taking the White House in November.