The U.S. stock market is closed for Martin Luther King Day, but there’s still some volume on the futures market. Dow Jones Industrial Average (DJIA) futures struggled to break out in early trading after the New York Times endorsed Elizabeth Warren and Amy Klobuchar for president of the United States.
Investors fear an Elizabeth Warren presidency and what it might do to the stock market. Her platform of breaking up tech giants, raising corporate tax rates and tightening regulation has investors scared.
“They won’t open the stock market if Elizabeth Warren is the next president” – Leon Cooperman.
Dow futures contracts struggled to break out on Monday. Low volumes on the U.S. public holiday may indicate a lacklustre session ahead.
S&P 500 futures and Nasdaq Composite futures were also flat. Bitcoin traded at $8,569.
Until now, the Elizabeth Warren campaign had lost much of its steam, slipping back behind Joe Biden in the polls.
Investors are generally more comfortable with a Biden White House as he’s seen as the moderate Democrat. A recent poll revealed that investors were neutral on Biden’s effect on the Dow Jones. But Warren was seen as ‘extremely bearish.’
The New York Times endorsement throws a grenade into the field and puts Warren back in the race. NYT editors said she had captured the zeitgeist:
Senator Warren is a gifted storyteller and a brilliant architect of regulation, where we would push back on some specific policy proposals, we are struck by how effectively her message has matched the moment.
The New York Times has historically endorsed a presidential candidate going back to the 1850s. They don’t always get it right, but it typically raises the profile of the candidate.
The Times endorsed Hillary Clinton in the last run although she lost the election to Trump. Before that, the NYT backed Obama. The newspaper hasn’t endorsed a Republican candidate since Eisenhower. The editors reserved their harshest words for current president Donald Trump:
Donald Trump is clear about where he is guiding the Republican Party — white nativism at home and America First unilateralism abroad, brazen corruption, escalating culture wars, a judiciary stacked with ideologues and the veneration of a mythological past where the hierarchy in American society was defined and unchallenged.
The stock market often recoils when Elizabeth Warren gains in the polls. The Dow took a small hit when Billionaire Marc Lasrey famously told investors to hit the sell button if she secured the White House.
You should go short the market the minute it’s clear that Warren’s the nominee. That’s when the market is going to realize there is a real possibility.
Warren still has a long way to go to catch up with Biden in the polls, but she’s back in the race.
Last modified: June 14, 2020 9:53 AM UTC