Wall Street Democrat Roger Altman told CNBC on Thursday the stock market's initial positive reaction to Joe Biden's resurgence in the Democratic presidential primary is because his chief rival, Sen. Bernie Sanders, is viewed as unelectable.
"The greater the extent that Biden is seen as the Democratic nominee, I think investors will be comforted," Altman said on "Squawk on the Street."
Altman, founder of investment banking advisory firm Evercore, said "a sense of some relief" rippled across Wall Street on Wednesday following Biden's strong Super Tuesday showing.
At this point, Altman said he likes Biden's chances in a head-to-head with Sanders. "I think Biden would win this nomination, but I would not bet my life," he said.
However, bond investor told CNBC late that he thinks Biden "is completely unelectable." The DoubleLine CEO said on "" that Democrats need to attract new voters to overcome voters President Donald Trump in November.
"I've got a feeling that if the younger people that support Bernie Sanders didn't show up for Bernie Sanders, that they're extremely unlikely to show up for Joe Biden," Gundlach said.
Biden vastly outperformed expectations on the biggest night in the race for the Democratic nomination to date, winning 10 states while Sanders won four. Sanders, a self-described democratic socialist who is loathed by many on Wall Street, had been seen as the front-runner and able to attract new voters, especially young ones.
"To say this is fascinating is an understatement," Altman said. "I've worked on nine presidential campaigns, including the current one, and I think I speak for a lot of people who follow this and have been into it. Nobody's ever seen anything like the events of the past four or five days."
U.S. equities soared Wednesday following Biden's victories. The Dow Jones Industrial Average gained nearly 1,200 points, or 4.5%. The S&P 500 rose by 4.2%. The Nasdaq rose 3.8%.
On Thursday, however, the three major measures were giving sizable portions of those gains back as fears persist around the economic impact of the coronavirus.
A major Democratic donor, Altman contributed $2,800 — the maximum allowed by law — to Biden's campaign in January.
Biden's campaign chairman also appeared at Evercore's offices earlier that month to meet with Wall Street's top donors in an attempt to rally them around Biden's once-struggling pursuit of the Democratic nomination.
Altman said he believed Sanders would not be able to beat Trump in November once American voters digested the Vermont senators' policy proposals.
Sanders, who unsuccessfully sought the Democratic presidential nomination in 2016, proposes sweeping changes to the U.S. economy, including the elimination of the private health-care industry in favor of a government-run single-payer health-care system. He also wants to significantly raise taxes on the richest Americans through the implementation of a wealth tax.
Sanders' campaign has said it would use the money to pay for "Medicare for All," as well as other bedrock proposals such as canceling student loan debt and providing free child care and pre-kindergarten .
"When President Trump drops $1 [billion] to $2 billion of opposition research on [Sanders], if he were to be the nominee, and tells the American people exactly what his positions really mean, he'd be very badly injured," said Altman, who was deputy secretary of the Treasury Department under Bill Clinton.
Altman's comments Thursday came shortly after Sen. Elizabeth Warren suspended her primary campaign. Warren's decision dwindles the Democratic field down to two main contenders: Biden and Sanders.
Biden has 565 delegates and Sanders has 506, according to NBC News.
Altman, who is Evercore's senior chairman, said he thought Warren's decision to drop out after a disappointing performance on Super Tuesday brought "clarity" to the race.
Former New York Mayor Michael Bloomberg also dropped out Wednesday and endorsed Biden.
"A two-person race is encouraging," Altman said.
