Smarkets Head of Political Markets Sarbjit Bakhshi joins Yahoo Finance’s Alexis Christoforous and Brian Sozzi to discuss how the coronavirus has impacted the presidential elections.

Video Transcript

ALEXIS CHRISTOFOROUS: But right now, I want to talk politics because we have a presidential election this year in November. We still have a Democratic Convention we need to get through in July. Here to talk about all that is Sarbjit Bakhshi. He is a political reporter at the betting exchange, Smarkets.

Sarbjit, great to have you here. Thanks for being with us. I know that there are wide-- differing opinions of just how President Trump has handled this coronavirus. How is he stacking up against the presumptive Democratic nominee, Joe Biden, for the general election, according to the Smarkets?

SARBJIT BAKHSHI: So over the last two weeks, we've had them neck and neck, really, kind of 40%-- 50% to 50% to either side. Over the last two weeks, Trump has managed to open up a lead and to go take his percentage up to 50%, whereas Biden's dropped down to 41%. And I think this is really down to people seeing basically a wartime president taking action over something as serious as the coronavirus crisis. So Trump's been doing better than ever, really, on our market against Biden of late.

BRIAN SOZZI: Sarbjit, good to see you again here. What do you see in terms of the vice president pick? Not to completely go off the rails here, but I think that might be the next major source of news for the Biden campaign. Who is leading in that race?

SARBJIT BAKHSHI: It's Kamala Harris has taken over that race, and she's at 32%. She's about 20% above the other competitors in that market. It's not an overwhelming majority, it's not over 50%, but it's a pretty strong lead that she has. It's hard at this point to see how anyone could challenge her.

ALEXIS CHRISTOFOROUS: Well, just to be clear, Sarbjit, you're saying that Kamala Harris may very well be the running mate of Joe Biden? Because he had hinted, or basically came out and said in the last debate, that his running mate would be a female.

SARBJIT BAKHSHI: That's right, but there's a number of very strong candidates who he could choose who are also female. But Kamala Harris, according to our market, is the one to beat at the moment.

ALEXIS CHRISTOFOROUS: What about Amy Klobuchar, had been talked about, Stacey Abrams as well? How are they doing on the Smarket's exchange?

SARBJIT BAKHSHI: They're number two and number three on our exchange. So I think they're trending about 16% and 10%. So again, they're well behind the leader, but they're still in the race. And it would be a very interesting race with either of those two women being his VP, I think.

ALEXIS CHRISTOFOROUS: What are the odds that we get an actual conventional Democratic National Convention come July? What are the odds for that actually taking place?

SARBJIT BAKHSHI: Well, we have a number of markets around whether that happens. I think at the moment, there is a presumption that it does take place, but there is a big question mark over how it might take place. I think that's the thing.

To have everyone in the room is an enormous security risk, just in terms of the pandemic that is going around. It's probably something that Democrats really want to avoid, even if there is a kind of reputational issue to not holding that convention in person because those conventions are used to rally the troops, get everyone ready for the election, and kind of put, you know, the Democratic candidate in a really good position. So you can see there's pros and cons to that, but I think at the moment, the market is saying that it will take place as a normal event.

BRIAN SOZZI: Sarbjit, are you surprised that-- you study this data closely. This is all you do. Are you surprised that the president hasn't taken a stronger tumble, just in terms of ratings?

SARBJIT BAKHSHI: So, right across the world, there has been a boost for every incumbent president or prime minister that's dealing with this crisis, and this normally lasts for two or three weeks as they seem to take action and deal with something that's really on people's minds. What then unfolds in the next few weeks generally is a drop-off in ratings, approval ratings, for the candidate. So we saw Trump go up-- his approval rating went up to 45% in the last month, improving like 2% or 3%.

But actually what we are probably going to look at is as the deaths come in, as there are more problems in what's happening, that those numbers come down. I think for Trump himself, he has a very, very tough position ahead of him. He's either going to lock down the US or try to innovate up.

Locking down the US is probably the safest thing to do, in terms of reducing the speed of the spread of a pandemic, but on the other hand, it does cripple the economy somewhat. Innovating up means trying new drugs, trying new procedures, and that could work, and could also [? knock ?] into the economy. On the other hand, the proven effectiveness is not there. So it's a really tough decision, I think every world leader is in it, and I don't envy any of them.

ALEXIS CHRISTOFOROUS: Sarbjit, I want to bring to your attention a CNN poll. I don't know if you had a chance to look at it, but it's out this morning, and it says, a majority of Americans, 55%, now say the federal government has done a poor job preventing the spread of coronavirus in the US. That's up about 8 percentage points in just the past week. This could certainly work against President Trump in the general election. Are you at Smarkets looking at how Americans are viewing the administration's response to the pandemic?

SARBJIT BAKHSHI: I think that is really viewed as a proxy by which President Trump is going to get elected or not. I mean, if he's seen to be doing a bad job, if the federal government is seen to be getting in the way of states trying to provide relief to their own people, then President Trump is going to do badly right across the board come November. It's a very-- as I said, it's a very difficult decision for all concerned. Everyone wants to do the best thing in this situation, but an action at a big level can hinder actions at small levels, and really you need the federal government to be working hand in hand with the states to deliver the best solution for everyone.

ALEXIS CHRISTOFOROUS: All right. Sarbjit Bakshi, political reporter at the betting exchange, Smarkets. Thank you so much for being with us and for sharing your insights.