Bernie Sanders seems to be sprinting ever closer to the 2020 Democratic nomination, and nothing that the left throws at him appears to be slowing him down.
In Iowa, where a voting app made a mess of the caucuses’ results, Sanders earned a virtual tie with moderate former South Bend Mayor Pete Buttigieg, although, through the convoluted process, Buttigieg wound up with more delegates.
In New Hampshire, the Vermont Senator blew the competition out of the water as predicted, further cementing his frontrunner status.
Now, with a Nevada caucus victory all but a formality at this point, the self-described “democratic socialist” is preparing to run away with the nomination…and this reality has the stock market spooked.
“There is definitely kind of fear [among clients] if you get a candidate like Sanders or say Elizabeth Warren,” said UBS global investment strategist Jason Draho on Yahoo Finance’s The First Trade. For now, the Sanders surge is keeping a lid on the market potential argues Draho.
“It’s more of a headwind that keeps markets from rising higher,” Draho noted.
Sanders is viewed by most rainmakers on Wall Street as anti-big business, anti-stock market and anti-wealth creation. In other words, bad for risk-taking in numerous asset classes, save for perhaps gold and bitcoin.
If Sanders is president, corporate taxes will likely head higher to pay for his Medicare for All plan and other social safety net programs. Greater regulation around stock buybacks and corporate governance could also come into play, especially if Sanders appoints Warren as Treasury Secretary, as some have speculated.
And that’s not all:
Billionaire investor Leon Cooperman said in a recent interview Sanders is more dangerous to stocks than the coronavirus. Cooperman has been a frequent critic of Sander’s and Warren over the past year.
“But Bernie, I believe, is stronger than people think, and [the] market is going to have to deal with that,” cautioned DoubleLine founder Jeffrey Gundlach. Even former Goldman Sachs CEO Lloyd Blankfein (a Democrat) is quoted in a new Financial Times story as saying he would perhaps vote for Trump instead of Sanders.
Should Bernie take the nomination outright and face incumbent Republican Donald Trump in the general election, the contest will undoubtedly revolve around the economy, with the socialist liberal taking on the world’s most famous capitalist.
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