There’s a little more than one year until the 2020 presidential election, and while the Democratic candidates are still jockeying for a competitive advantage, one thing is true: The presumed front runner, former Vice President Joe Biden, is not a sure bet. The title of front runner among the Democratic hopefuls has at times slipped into the hands of Senator Elizabeth Warren.
Warren has gained some significant momentum over the past several months, closing the polling gap between her and Biden. She’s drawing big crowds at her rallies, she comes across as very intelligent, and she’s not afraid to ruffle some feathers in the process.
Again, we’re still a year out from the 2020 election, so there’s a lot that remains to be decided when it comes to President Trump’s Democratic challenger. But Warren’s rise and hypothetical presidency has piqued the interest of Wall Street investors. Specifically, investors are worried about their returns should Warren become president due to her anti-Wall Street rhetoric. Many believe that Wall Street would be more regulated should she win, which they see translating to lesser returns on investments. Now, that’s not to say that some stocks would fare very positively under a Warren presidency, but regardless, it’s worth taking a closer look at as she appears poised to earn the Democratic nomination.
So, what would the stock market look like under an Elizabeth Warren presidency? Let’s take a look at the good, bad and ugly.
Like nearly all Democrats, Warren is a big supporter of renewable energy and sustainability, having been among those in the Senate to support the ill-fated Green New Deal. Noting this, clean energy stocks would be one market that would likely make a big jump under a Warren presidency. Companies like First Solar and TerraForm Power would likely see a big boost. In fact, some of the conventional energy stocks could also benefit from this, even if it’s not what Warren desires. Energy stocks can be difficult to project at times, but a crackdown on big oil could end up helping such stocks more than it could end up hurting it.
All you need to do is read up on Elizabeth Warren’s history with Wall Street and her adamant disapproval for all of President Trump’s Federal Reserve nominees to know how financial stocks would fare under her presidency: negatively. Warren is no fan of big banks and private equity, and this would likely translate to more regulation on this market should she win the election. It would mean lesser returns.
Another market that should beware if Warren becomes president: technology. You’ve likely read about Warren’s feelings about companies like Facebook, and you may have even heard about when Facebook’s Mark Zuckerberg recently told a group of employees off the record how bad it would be for the company should Warren win. She’s no fan of big tech. In fact, she wants to break up the big tech companies and promote more competition. Facebook isn’t the only company that should fear a Warren presidency, but Amazon, Apple, Netflix, Microsoft, etc.
In a Warren presidency, health care might be the market that’s most negatively affected. A lot of this has to do with Warren’s support of a Medicare-for-all plan, which would have a very negative effect on some of the biggest health stocks, such as CVS Health, UnitedHealth and Johnson & Johnson. Warren also strives to end private health care for good, which wouldn’t bode well for health stocks.
All in all, a Warren presidency would likely have a negative impact on more stocks and markets than it would have a positive impact on thanks to increased regulation on certain markets. That’s not to say that stocks would nosedive or that Wall Street would be in trouble, it’s just that returns likely wouldn’t be what they are now. Again, we’ve got a long way to go until November 2020, but it’s worth discussing some of the factors that separate some of the leading Democratic presidential hopefuls now.