Turn on CNBC or Bloomberg TV and you’ll hear at least one Wall Street analyst screaming about the danger of an Elizabeth Warren White House on the stock market.
Billionaire investor Leon Cooperman joked that “they won’t open the stock market if Elizabeth Warren is the next president” and accused her of “sh*ting on the American dream.” Hedge fund managers Paul Tudor Jones and Steve Cohen both predicted a stock market drop between 10-25% if she was elected. Mark Mobius agreed that a 25% drop was possible.
But what if they’re wrong?
David Zervos, chief strategist at Jefferies thinks the Warren scaremongering is overplayed. He compared her agenda to Barack Obama, who oversaw a 140% stock market run during his White House tenure.
“[Warren is] not that different to Obama. If you put the two of them side by side in 2007, they had very similar agendas: healthcare, regulation, financial, energy, environment. And from 2009 going forward, when Obama took office, we never looked back. The stock market just rallied.”
The stock market soared under Barack Obama. Could Elizabeth Warren’s similar agenda trigger a similar rise? Source: Market Watch
Elizabeth Warren: a threat to the stock market?
Warren has emerged as the clear leader in a stacked field of Democrat presidential candidates. Overtaking Biden in polls and betting markets, she will likely take on Trump in the 2020 election.
But her policies have Wall Street nervous. Money managers point to her proposed “wealth tax” as well as strict attitude towards banks, tech companies, and energy companies as reasons to be bearish.