Written by: Greg Valliere | Chief U.S. Policy Strategist, AGF Investments FIRST, OUR PREMISE: Donald Trump, spinning out of control, abandoning allies, ignoring advice from virtually everyone, is clearly vulnerable. Wall Street may assume that he will win re-election, but we think he’s the underdog — provided the Democrats nominate a plausible president. THEREIN LIES THE RUB: Tonight’s debate is important, because it may answer a crucial question — is this really a race between Elizabeth Warren and Joe Biden, or is someone lurking who’s about to catch a wave, as Barack Obama did in 2008? OUR HUNCH IS THAT WARREN MAY HAVE PEAKED TOO EARLY: The front-runner becomes the target, and suddenly Warren is generating second thoughts. Is she electable? Is she, as some Democrats grumble, a hectoring elitist? How can she pay for her staggeringly expensive agenda? She will be playing defense tonight. BIDEN NEEDS A STRONG SHOWING: He’s been adequate in the early debates, but he’s one stumble away from a free-fall. Bernie Sanders’ heart attack re-focused attention on the age and health of the candidates, and Biden carries the added burden of defending his son’s business dealings, which may not have been illegal but sure looks like cronyism. WHO COULD EMERGE? The speculation won’t end about a late entrant. Most Democrats would be thrilled to see Michelle Obama run, but she continues to rule it out, in public and in private. There was a buzz about Michael Bloomberg this week; he reportedly is aghast that the anti-Wall Street radical Warren could be the nominee. But Bloomberg, 77, has flirted with running repeatedly, only to demur. SOMEONE WILL SHINE TONIGHT, and our guess is that Mayor Pete Buttigieg may be the candidate to watch. We were at an event last week in South Bend, Ind., and asked everyone we met what they thought of Buttigieg — and to a person, Democrats and Republicans, blacks and whites, young and old said he’s an exceptional mayor and a decent fellow. They’re proud of him, and they’re rooting for him. BUTTIGIEG HAS RAISED PLENTY OF MONEY and will stay in the race well into the spring, hoping that Biden fails to energize the base while Warren looks increasingly polarizing. The ultimate goal in this marathon, of course, is winning 270 electoral votes, which continues to be Biden’s strong suit, as he will emphasize tonight. THIS NOMINATION IS WORTH WINNING because the Trump White House is in utter chaos, vilified by virtually all Republicans for un-doing years of sacrifice by U.S. and Kurdish troops, who managed to contain ISIS. (See this morning’s Wall Street Journal editorial). And the Ukrainian impeachment probe is yielding results; the next bombshells will come from John Bolton, who knows where all the bodies are buried. SHOULD THE MARKETS CARE? Absolutely, because Trump is recklessly erratic, and his own party is concerned about his stability. The political climate is so volatile that any Democrat has a chance of winning the presidency — even one who favors dramatically higher taxes, a resurrection of regulations, and sweeping new government programs. If Warren emerges tonight as the clear front-runner, the markets most definitely will have to worry.