Financial markets are assigning a zero probability to the election of a left-wing Democratic President in the United States

Despite Bernie Sanders' good results in the first Democratic primar ies in the United States, financial markets continue to assign a zero probability to the election of a left-wing Democratic President in the United States. They probably believe that the good economic situation in the United States and the rejection of a "socialist" President will ensure that Donald Trump will be re-elected. Indeed, when we look at Mr Sanders' economic programme (which we summarise below), we see that its implementation would certainly result in: A return of inflation (due the sharp rise in low wages), and therefore rising interest rates; A sharp fall in share prices (due to a tax policy and regulations that would be negative for shareholders); A rise in long-term interest rates (as a result of inflation and a sharp increase in public spending); A fall in real estate prices (due to a capital gains tax and rent control). None of these developments are currently expected.