Democratic Challenger Joe Biden holds a double-digit lead over President Trump in most polls. While polls aren’t foolproof and can’t tell us what will definitely happen in November, it’s enough for some people to start to worry.
While many corporate leaders support Democratic causes, they’ve been all-too-happy to enjoy the lower regulations and lower taxes ushered in by the Trump administration. If Biden wins, and especially if he leads a sweep of both Houses, Wall Street could be facing an uphill battle for years, which could hurt the markets and the retirement accounts of many investors.
From Goldman Sachs to Credit Suisse, investment firms are warning clients to get ready. If Biden wins, they expect lower corporate profits in the years ahead, which should translate into falling share prices.
But not everyone is convinced.
Adam Crisafulli, founder of Vital Knowledge, said:
The markets “aren’t focused too much on this issue at the moment. Part of this is a function of 2016, where polls also signaled a Trump defeat for most of the year (although Biden’s lead now is far ahead of where Clinton was at this point in 2016).”
He also points out that investors know things could be very different by November, especially if we get a treatment for COVID-19, more stimulus spending, and it looks like the recovery is taking hold.
Still, with the Nasdaq at record highs, investors wouldn’t be completely irrational if they protected some of their profits… just in case.