Since Donald Trump’s election on November 8, 2016, the S&P 500 Index surged over 50% through December 2019. The Dow Jones Industrial Average also added nearly 10,000 points over that stretch.
While visiting India this week, Trump warned that the stock market gains could evaporate if he loses the upcoming presidential contest.
According to The Times of India, Trump predicted that the stock market will “crash like nobody has seen before” should voters choose a Democrat over him in November.
This is not scare-mongering. One of the biggest dangers facing the U.S. stock market besides the coronavirus outbreak is a Democrat winning the White House. With centrist Democrats now lagging Bernie Sanders, a self-declared socialist, the lights are flashing red.
With the five remaining Democratic moderates splitting the votes among themselves, the ascendancy of Sanders is all but assured. Barring an unexpected turn of events, the Vermont Senator could very well get the nomination.
Tax and regulatory cuts created the stock boom, but the current Democratic frontrunner is advocating policies that would greatly increase the tax burden on U.S. corporations and citizens. What Trump gave Corporate America, Sanders is going to take away. A Sanders win could instantly reverse the stock market boom.
Donald Trump is, of course, fighting for his political life and will use every trick in the book to get reelected. But it would be foolish to ignore his warning just because he has a rather long record of unabashed remarks.
High-profile personalities who have differed with him on various issues now agree with him that losing in November to a Democrat, specifically a socialist, would be disastrous for the economy.
Former Goldman Sachs CEO Lloyd Blankfein believes a Sanders presidency would destroy the U.S. economy.
Just this week legendary investor Warren Buffett expressly stated that he would vote for former New York Mayor Mike Bloomberg, a centrist, over Sanders.
At the same time, Buffett acknowledged the growing wealth and income inequalities in the U.S. while taking a dig at Sanders: “I don’t think we should kill the capitalist system.”
Other billionaires who are opposed to Sanders include Jeff Gundlach. Last month Gundlach warned that a Sanders win in November would be catastrophic for the markets.
Though Trump was addressing a round table of Indian CEOs when he made the comments, he was not aiming them at the executives but rather voters back home.
As an incumbent who is running at a time of increased prosperity, Trump probably sees Sanders as the ultimate political heel. He will remind investors and citizens that Sanders is here to take away all the progress made over the past four years.
Disclaimer: The opinions expressed in this article do not necessarily reflect the views of CCN.com.
Last modified: June 12, 2020 10:40 PM UTC