After President Joe Biden announced his withdrawal from the election, Vice President Kamala Harris took over and quickly became the clear front-runner for the Democratic presidential nomination.
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Although several potential competitors quickly supported Harris, she may not necessarily be nominated. Harris raised $50 million yesterday, easing concerns about whether the Democratic Party has enough resources to run.
"Although Harris is not popular, we believe that she is slightly inferior to Trump, but she has the opportunity to show herself to the American people again. She may be more politically threatening than she has been in the past four years after a month," Analysts at Piper Sandler said.
Therefore, the "Trump trade" may face pressure, as the former president's victory now appears more uncertain than a week ago.
The "Trump trade" refers to investment in assets expected to benefit from the re-election of the former president.
Shortly after announcing his withdrawal from the election, Biden supported Harris. Subsequently, she received support from Bill and Hillary Clinton, the leader of the House Black, Hispanic and Progressive Party caucus, as well as some potential nomination competitors, including Governor Gavin Newsom of California.
Meanwhile, other top Democrats such as Chuck Schumer, Hakeem Jeffries, Nancy Pelosi, and Barack Obama have notably remained silent. According to analysts, Schumer and Jeffries may follow their members' leadership and may soon support Harris, while Pelosi and Obama are believed to support an open party convention, where stronger candidates than Harris may emerge.
Regarding the next step, delegates to the convention will decide on the nominees. Biden's delegates at the convention will become free agents and can vote for anyone they choose.
"As Biden's delegates, they may value Biden's supporters and have a good impression of Harris." Analysts said.
About 14% of Democratic delegates are super delegates (party leaders), who can support anyone, although whether they can vote in the first round will depend on the DNC officials' decision. The virtual vote by DNC officials before the Chicago convention they have been considering now seems unlikely.
In a possible match-up between Trump and Harris, Piper Sandler analysts believe Trump has a slight advantage because Harris' approval ratings are low. However, her approval ratings are not as fixed as Trump's and may improve after a month of favorable media coverage and a strong party convention speech.
"Her performance in campaign speeches, interviews, and potential debates will be key to whether she can persuade voters that she is capable of the job and will govern as a mainstream Democrat. If she can do that, she may catch up with or even surpass Trump," Piper Sandler analysts concluded.