- Sen. Elizabeth Warren has been surging in the latest Democratic primary polls, and analysts are starting to consider how a Warren administration would affect different sectors of the economy.
- A Warren victory against President Trump, coupled with a Democratic takeover in the Senate, could bring new regulatory scrutiny to the financial, energy, and health care sectors, Raymond James strategists wrote Monday.
- RBC Capital Markets noted big internet companies could also see regulatory headwinds after a Warren win. The candidate previously called for the government to break up major tech companies like Google and Facebook.
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Sen. Elizabeth Warren has seen a steady surge in the polls for the 2020 Democratic primary, and market analysts analysts are looking into how a Warren administration would affect the economy.
Warren is “rightfully considered a front-runner” and is “within striking distance” of winning the nomination and White House, Raymond James strategists Ed Mills and Chris Meekins wrote in a Monday note. President Trump is still likely to win reelection “by a hair,” they added, but “investors are not appropriately weighting the likelihood of a Warren presidency.”
They may want to start paying attention, because a Warren victory – and an overall Democratic takeover of the Senate and White House – could hit the financial, health care, and energy sectors as progressive regulation hits bottom lines, the strategists said.
Raymond James puts forth the following developments, which they think could weigh on stocks in those sectors:
- A fracking ban boosting oil and natural gas pricing.
- A push for green energy driving renewables.
- A wealth tax propping up fiscal stimulus.
- Federal health insurance advancements knocking private providers.
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Analysts from RBC Capital Markets echoed the projection, noting that communication services and large internet firms could face new volatility if the Massachusetts congresswoman wins. Warren has previously called to break up big tech companies. Market fears could send shares of such firms lower after a Warren victory, though it’s unclear if such an antitrust endeavour would be feasible.
Facebook CEO Mark Zuckerberg vowed to overcome break-up actions when asked specifically about Warren in leaked audio obtained by The Verge. He said a confrontation with the federal government would “suck,” but that if Warren were elected, Facebook would “have a legal challenge” to any antitrust actions.
“What would really ‘suck’ is if we don’t fix a corrupt system that lets giant companies like Facebook engage in illegal anticompetitive practices, stomp on consumer privacy rights, and repeatedly fumble their responsibility to protect our democracy,” Warren fired back on Twitter Tuesday.
Wall Street might fear a Warren presidency and the regulation she’s called for, but the concerns are “getting overblown,”CNBC’s Jim Cramer said Tuesday. The candidate isn’t “nearly as anti-business” as portrayed, he added.
“I want to stop the fear of Sen. Warren. I really think that’s a mistake,” Cramer said.
The CNBC contributor said in September that financial industry CEOs were telling him “she’s got to be stopped” in reference to Warren.
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