Clinton's Competition: How Will the Markets React?

It’s way too early in the presidential race to tell, but I like considering which candidates could pry the economic policies out of the other. Case in point: the latest nominee for the democratic party, Vermont Senator Bernrnie Sanders.

Some are quick to label Bernrnie Sanders as a crackpot Socialist. I’ve spent a lot of time in Vermont, and I can tell you — he’s a serious politician, and his policy beliefs are 100% consistent. This isn’t to say whether I’ll vote for him — but it will force Hillary Clinton to come out in the open.

Up ‘til now, Hillary hasn’t let on much about her economic policies. That could change if Sanders enters the race. It will force her to articulate those policies — maybe even move to a more liberal agenda to go head-to-head with her latest competitor.

Plenty of people believe Hillary will become the next president. Maybe she will, maybe she won’t. But she’s a likely enough candidate — well ahead of any Republican candidate by a long shot — that if Sanders does push her economic policies in a more liberal direction, it could have some serious effects for the markets.

The markets could tuck tail and run in the face of greater regulations. Banks and companies might push back fearing more regulations could be bad for stocks. Up for debate is also the issue of Social Security, and whether higher taxes will be used to fund other such safety nets like Medicare and Medicaid.

As for Sanders, if he takes office he’s very clear about wanting to raise taxes on the highest earnrners. And he’s all for a $15 minimum wage. That might hurt consumer confidence amongst higher earnrners and raise it for lower ones. Then again, those higher wages may also result in higher prices, meaning low earnrners would still be stuck.

This could turnrn out to be one of the more exciting races in some time. And, with 17 months to go until election night, there’s plenty of time to prepare for whatever surprises the presidential results force the markets to throw at us!

Whatever happens, America’s going through some changes. It won’t be the end of America, just America the way we know it… which will be the topic of July’s Boom & Bust.

John Del Vecchio

John