Author Topic: How much will the stock market fall if Elizabeth wins?  (Read 2752 times)

RuleNumberOne

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How much will the stock market fall if Elizabeth wins?
« on: October 01, 2019, 09:23:22 AM »
https://www.cnbc.com/2019/10/01/elizabeth-warrens-rise-has-some-analysts-uneasy-on-health-care-tech.html

"...according to Raymond James strategists Ed Mills and Chris Meekins.

“We believe Warren is within striking distance of winning both the nomination and White House,” Mills and Meekins wrote. “While countless external events can and will happen between now and Election Day, we believe that the market underappreciates Warren’s ability to capture the nomination and win the Presidency.”

While the brokerage noted that their base case is still for President Donald Trump to clinch a narrow victory, his edge in key battleground states appears to have “a ceiling.” A ceiling, Raymond James thinks, Warren may have the best shot of using to her advantage."


Read the Footnotes

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Re: How much will the stock market fall if Elizabeth wins?
« Reply #1 on: October 01, 2019, 10:46:03 AM »
Where's the option for the stock market will rise? Or won't fall?

LC

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Re: How much will the stock market fall if Elizabeth wins?
« Reply #2 on: October 01, 2019, 10:51:29 AM »
The question also assumes that any one particular President has a significant impact on the economy/stock market. This I would argue is not substantiated by historical data.
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RuleNumberOne

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Re: How much will the stock market fall if Elizabeth wins?
« Reply #3 on: October 01, 2019, 06:47:51 PM »
A wipeout of the energy, financial, drug, healthcare companies should by itself contribute a 30% haircut.

The multiplier effects could contribute another 20% fall.



Gregmal

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Re: How much will the stock market fall if Elizabeth wins?
« Reply #4 on: October 01, 2019, 06:55:25 PM »
Don't forget big tech, which is like 50% of the Index!

Ahab

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Re: How much will the stock market fall if Elizabeth wins?
« Reply #5 on: October 01, 2019, 07:22:27 PM »
Trump will win if she's the nominee (75% chance in my view). Bernie would honestly be more worrisome for markets, because he would fare better in a general election.
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Viking

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Re: How much will the stock market fall if Elizabeth wins?
« Reply #6 on: October 02, 2019, 12:43:53 AM »
The question also assumes that any one particular President has a significant impact on the economy/stock market. This I would argue is not substantiated by historical data.

I agree in general. Hoewever, i think this time may be different. Trump has been very good for businesses in the US and business sentiment soared after he was elected. Warren would be his opposite. More regulation. Higher taxes. Higher costs. Lower profitability = lower stock prices. Business sentiment would plummet.

Cardboard

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Re: How much will the stock market fall if Elizabeth wins?
« Reply #7 on: October 02, 2019, 04:14:19 AM »
Wow!

Viking, I think that you are more a Liberal supporter (unless I am mistaken) but, your logic or intellectual honesty is beautiful here.

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Dazel

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Re: How much will the stock market fall if Elizabeth wins?
« Reply #8 on: October 02, 2019, 05:14:45 AM »

If this continues...you will see Hillary enter the race again and she will win...market will rise. Many would go back and change their ballot to Hillary if they could.

Any way to buy an out of the money call option on that?lol

Read the Footnotes

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Re: How much will the stock market fall if Elizabeth wins?
« Reply #9 on: October 02, 2019, 05:19:09 AM »
The question also assumes that any one particular President has a significant impact on the economy/stock market. This I would argue is not substantiated by historical data.

I agree in general. Hoewever, i think this time may be different. Trump has been very good for businesses in the US and business sentiment soared after he was elected. Warren would be his opposite. More regulation. Higher taxes. Higher costs. Lower profitability = lower stock prices. Business sentiment would plummet.

I agree with LC and I think that the spike in the stock market when Trump was elected was due to a reduction in the uncertainty premium and/or the ambiguity premium. Just because Trump says over and over again that the market went up because he was elected, does not make it true. The 2016 campaign was so polarizing that the market likely would have gone up regardless of who won.

I also agree with Viking that Warren is promoting some absolutely terrible themes if not ideas. I'm not even sure that Viking identified the worst of Warren's ideas and Warren is certainly not the worst that the left has to offer.

There are several complicating factors that make it harder to accept Viking's analysis as having any predictive power. I will address three.

First, Trump has some absolutely terrible ideas with respect to long-term growth of the economy. Many of his ideas might produce short-term results, but can be very damaging over the long-term. This has been discussed here previously, but I will briefly mention that redistribution of taxes, redistribution through tariff's are not the type of long-term investments in capital or human capital that one would want to see long-term improvements. Plus chaos has a measurable impact on investment in capital, and Trump has been creating chaos. Finally, his seeking to influence monetary policy in order to get reelected is similar to his irresponsible use of debt that lead to the collapse of several of his businesses. So though Viking makes excellent arguments regarding this issues with Warren, we have not compared Warren's terrible ideas to Trump's terrible ideas. They both have plenty so this makes a relative comparison more ambiguous.

The second complication is that Warren is a chameleon. Look at the native American issue. If she's willing to pretend to be Native American, I think she can pretend to be anything that is necessary to get elected or stay elected. That could include switching to pro-business positions as soon circumstances allow. She won't be able to do that at this point in the primaries, but it's possible she could do that later, or secretly signal to businesses through backchannels what her true policies will be. Look at Obama's trajectory as an example. People worried that he was going to destroy the country if elected and all sort of crack-pot conspiracy theories were floated about how bad he would be, but once elected he probably was closer or cozier with the big banks than any president in history. The big banks are just one example. Obama just needed to keep that hidden from much of his base.

I won't divulge them here, but I have some local and personal insights in to Warren that make me suspect that her fighting for the little guy stuff is not so much a true belief, but more of a vehicle for her, just like being native American served it's purpose at one point.

A final issue is that the wheels may be coming off the economy. A recession and market pull-back may be in the making regardless of who is elected. Who knows how business or market difficulties would change the policies of either candidate. Would Obama have had a different relationship with the big banks if he didn't need them so much because he took office during a major financial crisis? I guess we will never know.
« Last Edit: October 02, 2019, 05:30:16 AM by Read the Footnotes »