Welcome to Thoughts on the market. I'm Michael Zezes, head of Public Policy Research and Municipal Strategy for Morgan Stanley.

Along with my colleagues bringing you a variety of perspectives, I'll be talking about the intersection between U.S. public policy and

financial markets. It's Wednesday, February 5th at 1 PM Eastern.

For markets, the 2020 U.S. election is all about what the outcome means for the policy choices of the US in 2021.

Investors care deeply about what it means for fiscal policy, health care, trade, and a variety of other areas that can change the

trajectory and makeup of the US U.S. economy.

And so it would be normal for markets to discount these impacts in 2020 once the candidates,

their policies, and their chances of winning are clarified.

So to investors, Monday's Iowa Caucus offered a chance to provide some of that clarity.

But in that sense, the events of Iowa probably disappointed investors.

And we're not just talking about the confusion and delays about the results of the vote,

though that certainly didn't help as Iowa has traditionally winnowed the field of candidates, but here allowed multiple candidates to claim a positive narrative and keep going.

It's the actual results that underscore how little we learned about which candidate might emerge as the front

runner and more importantly what types of economic policy choices will be presented to the American

people in November.

One reason is that results show a relatively tight grouping of multiple candidates as top delegate winners.

Additionally, it appears one candidate may have won the most delegates and another the most raw votes.

Hence, there's multiple narratives emerging and not surprisingly

little incentive for candidates to drop out at least not yet. Another reason is that

the delegates that various candidates won in Iowa are of limited importance in securing the nomination.

Iowa's delegate award is only about 1% of the total delegates at stake.

The New Hampshire primary is right around the corner, but here we also doubt that we'll get much clarity after that event. Like Iowa, it's a the some candidates who are better known within the region.

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