Democratic presidential candidate Sen. Elizabeth Warren (D-MA) spoke at a rally in Washington Square on September 16, 2019 in New York.
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Wall Street can't stop talking about Elizabeth Warren, and because fears of a trade war and recession threaten to weaken, the rise of the Massachusetts senator is set to become the new market obsession.
"With the cooling of the trade war," Impeachment looks like a sitcom and recession calms down, Elizabeth Warren is the new wall of anxiety, "Josh Brown, CEO of Ritholtz Wealth Management, tweeted on Thursday." You will hear about her night and Wall Street. Any strategist will point out her nomination as a risk to watch in 2020. "
The Dow Jones Industrial Average reached another new record Thursday, carrying its profit for the year up to 1
one year before the November presidential election By 2020, some of the biggest investors on the street and many market strategists for big banks have already expressed concern about the prospect of winning Warren.
If Warren takes the White House, the S&P 500 will sink about 25%, billionaire Paul predicts. Tudor Jones: Longtime investor Leon Kuperman was among the most vocal critics of the president's hopes, claiming he was "moving" on "the dream of the Americans" and seeing a market correction in Warren's presidency. Recently, Jamie Dimon became involved in a feud, saying that Warren "offends successful people."
Wall Street brokers and market research firms have made it clear and clear about the damage Warren's profits would inflict on stocks. Barclays, Oppenheimer, Jefferies and Mizuho recently warned separately about various sectors, including health services, energy, banks and biotechnology, that would suffer under Warren's policies. Goldman Sachs warns that profits from the S&P 500 could be reduced by 11% if the corporate tax cut for 2017 is completely reversed.
Warren recently stepped up its pressure on the billionaire class, saying its tax proposal could be doubled to 6% on the $ 1 billion balance to help pay for a Medicare for All plan.
Other fears lessen
Lecture is likely to take center stage on Wall Street as the US-China trade battle that has turned the market over the past 18 months is finally approaching a resolution. China said on Thursday the two largest economies in the world agreed to abolish existing trade tariffs.
Fears of recession are also cooling, as recent economic data suggest improvement. The indicator for services activity in the US exceeded expectations for October, while the labor market remains stable, as job creation easily exceeded last month's estimate.
The slowdown in corporate earnings this year also seems to be reversing, as results this season have largely come out better than expected. Of the 87% of S&P 500 companies that have reported so far, about 74% are at the top of analyst estimates, according to FactSet.
Different from the ultramillionaire tax, Warren also seeks to change the tax rules for private equity firms and rewrite corporate tax cuts for 2017. Warren's plan also requires other taxes that are likely to affect the wealthiest Americans , including a proposal for capital gains tax.
While Warren's plans to seize Wall Street and corporate America may disrupt markets, worries may be overcome, as he may need to win the presidency and have a Democratic majority in both houses of Congress so that someone can from his bills to become a reality.
"Investors need to consider the likelihood of potential results," David Kostin, chief strategist at US Goldman Gold, said in a note last week. "Before basic policies of a new administration are introduced, several conditions must be met: a certain candidate must win the presidency; the candidate's party must control the House and Senate; the candidate must choose to implement certain policies and must pass legislation through Congress . "