Displaying items by tag: sanders

(Washington)

The Iowa caucus kicks off today and do not be surprised if market get blindsided by the results. Bernie Sanders holds a solid lead in Iowa and he is likely to win the day in the state. That said, markets have been dismissive of Bernie for a long time, and it seems quietly realistic that despite all the predictions of him winning, him actually doing so might spook investors.

FINSUM: We would not be surprised at all if we saw a mini “Bernie correction” when Iowa results come out.

(Washington)

New polls are out and Sanders is at least tied with Biden. He has been reported as ahead recently, but a flurry of recent polls have all confirmed that he is at least tied. This could be a major issue for the stock market, as Wall Street is wary of Bernie. While they revile Warren, they understand her thinking and respect her regulatory acumen. Bernie is seen as a wildcard. It makes sense then that for each 10-point rise Sanders has seen in the polls, the S&P 500 has dropped 1% based on a rolling two-week relationship, according to UBS.

FINSUM: We would have to agree with this assessment. If Sanders wins the bid, the market will probably have a little blip, and then any polls that show Sanders ahead of Trump would be very worrying for markets.

(Washington)

If you are hoping a middle of the road Democrat wins the party’s bid, then yesterday’s poll is an alarming one. In a new CNN poll, Bernie Sanders completed a 9-point swing to overtake Joe Biden by 3% in polls of Democratic voters. He rose a full 7 points to 27% support versus Biden’s fall of 2% to 24% overall. The first votes for the candidacy start on February 3rd in Iowa and February 11th in New Hampshire.

FINSUM: Purely looking at this from a political perspective, we think it is hard to say which candidate has the best odds of beating Trump. On the one hand, Biden can certainly capture more of the centrist voters, but on the other, Bernie is a much more realistic embodiment of the current Democrat party and could galvanize its identity to voters.

(New York)

Warren and Sanders’ tax plans have been scaring those on the right for several months, especially as Warren has risen to become the dominant candidate for the Democratic bid. But how much of a negative effect might her plans have on the market? The answer is probably not much, and if anything, it will be bullish for risk assets. Firstly, Warren’s plan will only touch the top 75,000 households in the country, so it is a niche focus. But secondly, because of the taxes imposed, ultra high net-worth families will need to be more aggressive in their asset allocation in order to continue to grow their wealth, meaning they will likely put more capital into risk-on investments.

FINSUM: This was quite a useful insight. It is hard to imagine Warren’s wealth tax being good for the market, but the logic of this argument (from Barron’s) seems sound.