Summary
Bloomberg has taken the SMI lead among the Democratic candidates, pushing Sanders to second place.
This is somewhat monumental as Bloomberg entered the race extremely late and has yet to even participate in a Democratic debate.
We made cautious statements as Bloomberg surged three weeks ago while almost surpassing Sanders to take the lead at that time. Now that he has sustained a relatively high SMI for numerous weeks and taken the lead, the time for caution is over.
One of the benefits of SMI (as well as other alternative data indicators) is that it tends to pick up on underlying trends prior to more traditional approaches (such as polls, betting markets, and political analysts). From this perspective perhaps we should have taken Bloomberg’s surge in January at face value.
Just before Iowa voting we posted:
“Another surprise has been the recent performance of Michael Bloomberg, who is not involved in Iowa. For months, ever since he entered the race, his SMI has pointed to a mediocre candidate, more akin to a second tier candidate than a front-runner.
Just in the past week, however, his SMI has surged to almost match that of Sanders. This could be a short-term phenomenon, such as one based on a recent event as back and forth versus Trump or based on his aggressive TV ad spending which included a Super Bowl ad. We will need to see if this trend can continue before making further forecasts involving Bloomberg.”
For comparison, Bloomberg has performed well in both polls and betting markets but has not taken the lead.
SMI, as a leading indicator, is pointing to Bloomberg taking the lead in polls and betting markets over the coming weeks.
Things to Watch Regarding Bloomberg
Besides following social media and alternative data trends, there are two things to keep an eye on over the coming weeks.
First, the 9th Democratic debate will take place February 19. Assuming Bloomberg participates, it will be an extremely important event in the race, perhaps one of the key moments. As of the writing of this post, his participation has yet to be confirmed though most assume he will be there.
Second, as highlighted in other posts, we expect potential surprises from high-caliber non-candidate moderate Democrats before Super Tuesday (on March 3rd). If Sanders looks to be gaining too much momentum, those who have yet to make any serious endorsements (such as the Obamas and Clintons) might do so — which could dramatically impact the race.
Of course, we have Nevada and South Carolina voting during this time period, but Bloomberg will not participate in them.