How is Bernie Sanders’ campaign performance impacting markets?
Capitalist Pig hedge fund manager Jonathan Hoenig discusses the potential impact of a Bernie Sanders presidency.
Sen. Bernie Sanders is surging in the polls and that has some stock-market investors recalibrating their expectations for the rest of the year.
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Sanders, the senator from Vermont, has the support of 27 percent of Democratic primary voters, according to a recent NBC News/Wall Street Journal poll, opening up a double-digit lead nationally. Additionally, the online platform PredictIt now gives the self-proclaimed Democratic Socialist a 58 percent chance of winning the Democratic nomination, up from 25 percent at the end of last year.
While the NBC News/Wall Street Journal poll shows President Trump’s job approval rating at 47 percent, tied for his all-time high, the president still trails Sanders and the four other major Democratic candidates in hypothetical general-election matchups.
“Bernie Sanders is still a long way from the White House, but several of his policies look very negative for U.S. equities,” Oliver Allen, assistant economist at London-based Capital Economics, wrote in a recent note. “If his support continues to climb, that could start to weigh on the U.S. stock market.”
Investors have cheered Trump’s stock-market friendly policies, including cutting corporate taxes and loosening regulations. The benchmark S&P 500 has surged 56 percent since his Nov. 8, 2016, election victory, but a win by Sanders puts those gains in jeopardy.
Sanders has championed reversing Trump’s corporate tax cuts, breaking up Big Tech, and shifting the balance of power from big business to workers.