Stocks Under a Warren White House
Elizabeth Warren is in a footrace for the Presidency. The pollsters have her down as a Democratic dark horse, but she’s at loggerheads with investors. What if Warren wins? Here’s how stocks might react…
Tech, the engine of portfolio returns recently, could go for a bunting! Warren’s made her name as a business basher, holding companies to account for privatizing the gains and socializing the losses. So, when looking at investors’ favorite FANG quartet, the Warrens of the world hate what they see. The big tech names could be facing a raft of regulation against them, or even break-ups as some flirt with online monopolies.
In terms of fossil fuels and fracking, the Massachusetts senator has a plan for that too! She’d reverse Trump’s corporate tax cut to fund a $1 trillion clean energy push. There are no prizes for guessing the loser there, but oddly, there are prizes for guessing the winner! ExxonMobil and Chevron could benefit from muted oil production, as that raises energy prices.
But even if some large energy companies evade Warren’s wrath, the banking sector has nowhere to hide. Big money investors are her “axis of evil,” according to Chris Kotowski of Oppenheimer bank, “despite public pension funds benefiting from their outperformance.”
In sum, the stock market is, has always been, and will continue to be the best place to turn money into more money. However, a widening chasm between left and right-wing political bobbleheads has thrown stock pickers a curveball. No President can keep a good business down, but investors should ponder their portfolio selections carefully as political risks begin to swell.