There is a growing undercurrent in markets that say a battle this fall between self-described socialist Senator Bernie Sanders and President Donald Trump could be bad news for stock prices.
As evidenced by the market’s strong run-up in 2020, investors have yet to exit stocks on fears of a big government Bernie winning the Oval Office. But his continued strong showing in debates and national polls may lead to some profit-taking sooner rather than later. The concern – Sanders shocks the market-friendly Trump.
“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.
Read more: yahoo