Ed Mills, Washington Policy Analyst at Raymond James, and Jeannette Lowe, Director of Policy Research at Strategist Securities, join 'Closing Bell' to discuss what they're looking for on Super Tuesday. “These developments in the Democratic primary could set the [Medicaid] and Hospital stocks up for a relief rally as the market likely prices in reduced risk of Bernie winning the Democratic nomination,” Stephens analyst Scott Fidel told clients. Shares of UnitedHealth are down about 7% since the coronavirus-driven market sell-off that pushed stocks to their worst week since the financial crisis.
Sanders is also advocating for policies including higher taxes on the wealthy, breaking up big banks and a $15 per hour minimum wage.
“Investors fear Bernie because he wants to cut off the head of capitalism by raising taxes significantly on the rich and using the funds to provide free everything to everybody else. He also wants to regulate everyone,” Yardeni Research’s Edward Yardeni said in a note. “No wonder investors are reacting to him as though he is going to infect us all with the virus of socialism.”
While stocks reacted poorly to the Fed’s lowering of interest rates by 50 basis points in order to combat the economic damage from the coronavirus, MUFG chief financial economist Chris Rupkey said the easing measure could be at play in the markets on Wednesday.
“The one-two punch thrown on Tuesday by the big Fed rate cut and the Biden win last night has put a floor under the stock market for now so investors are giving a huge sigh of relief and short-sellers are exiting stage left,” Rupkey said in an email to clients.
To be sure, there is a narrative that Sanders as a front runner is bullish for equities, because President Donald Trump would have an easier time beating him. But Wall Street seems to see Biden and Trump as safer for equities.
“That makes a market-friendly matchup between President Donald Trump and Biden the most likely outcome,” Michael Pearce, senior U.S. economist at Capital Economics, said in a note.
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