The US stock market has had a week that bulls would love to forget, and the Dow Jones beating continued following Thursday's opening bell. Following the exit of Wall Street favorites Michael Bloomberg and Hillary Clinton from the 2020 US presidential race, that drubbing could get even worse in the months to come.
Dow Continues Slow Bleed
As of 1:13 pm ET on Thursday, the Dow Jones Industrial Average had plunged by 133.47 points or 0.52 percent. The S&P 500 fell 0.45 percent, while the Nasdaq lost 0.54 percent as the stock market once again failed to recover from Monday's bloodbath.
Thursday's drop follows Wednesday's 133.17 point Dow plunge, which was accompanied by a 0.65 percent retreat in the S&P 500 and a 0.93 percent decline in the Nasdaq.
The stock market also fell on Tuesday. Those declines wouldn’t even be worth noting had it not been for what transpired just one trading session prior, when the Dow cratered by as much as 510 points before recovering to close at a loss of 206.67 points. Tuesday’s minor decline, coupled with this morning’s pre-bell futures slip has put the Dow on track for its second consecutive weekly loss following nine straight weeks of gains.
Moderate Democrats Concede to Bernie Sanders Wing
The disappointing turn of events for the stock market comes just as the Democratic field is shaping up for the 2020 US presidential primary. This week has already seen two top-tier candidates - former New York City Mayor Michael Bloomberg and former Secretary of State Hillary Clinton - throw in the towel, tacitly conceding that this primary belongs to the Bernie Bros and the ascendant progressive wing of the party that Alexandria Ocasio-Cortez represents.
That’s not something that Wall Street wants to hear.
Billionaire Michael Bloomberg, remember, had early backing from Warren Buffett. It’s unlikely that the Berkshire Hathaway CEO would so readily throw his support behind a candidate who would threaten the returns of his $495 billion conglomerate.
Bloomberg, green power proponent though he may be, at least understands that the Green New Deal pumped by Alexandria Ocasio-Cortez and co. is dead in the water - and dares to say so publicly.
As he wrote in his op-ed announcing his decision to stay out of the Democratic primary:
“The idea of a Green New Deal — first suggested by the columnist Tom Friedman more than a decade ago — stands no chance of passage in the Senate over the next two years.”
Similarly, critics of former Democratic presidential candidate Hillary Clinton have long derided her as a crony capitalist. However, a crony capitalist is preferable to an out-and-out socialist, at least so far as stock market returns are concerned.
Clinton’s chummy relationship with Wall Street was an open secret during the 2016 campaign. Consider this excerpt from a speech she gave before a private Deutsche Bank audience, in which she suggested that Wall Street had the solution to what ailed the US (emphasis added):
“Remember what Teddy Roosevelt did. Yes, he took on what he saw as the excesses in the economy, but he also stood against the excesses in politics. He didn't want to unleash a lot of nationalist, populistic reaction. He wanted to try to figure out how to get back into that balance that has served America so well over our entire nationhood. Today, there's more that can and should be done that really has to come from the industry itself, and how we can strengthen our economy, create more jobs at a time where that's increasingly challenging, to get back to Teddy Roosevelt's square deal. And I really believe that our country and all of you are up to that job.”
A politician who delivers that speech behind closed doors is unlikely to pursue a predatory tax on securities trades, even if she does pay lip-service to progressive policies in public.
This is AOC's Party Now
By declining to even run in the 2020 primary, Michael Bloomberg and Hillary Clinton are formally conceding that they no longer have a place in a Democratic party that has rapidly changed into something they no longer recognize.
This is the party of Bernie Sanders and Alexandria Ocasio-Cortez, and the democratic socialists have already begun to remake it in their image.
Disclaimer: The views expressed in the article are solely those of the author and do not represent those of, nor should they be attributed to, CCN.