Peter Boockvar, chief market analyst at The Lindsey Group, says that for investors, it doesn’t matter who wins the presidential race – the looming recession and bear stock market should be your greatest concern.
“As we are in the second longest bull market of all time and as we approach the eighth year of this economic expansion (however punk), odds are high that whoever the next president is they will preside over a recession, a bear market and rising debts and deficits,” he wrote for CNBC.com.
“But how the markets react over the next four years may not be that different regardless of who is president,” Boockvar wrote.
“We are in the midst of the third major asset price bubble in the past 15-20 years. Unfortunately this is the biggest one ever, manifest mostly in sovereign and corporate bonds. All assets priced off low rates are thus by extension in a bubble as well. Therefore the behavior of central bankers and the influence of global interest rates will be the main driver of asset prices over the next four years, not the next president,” he wrote.
“As for the economy, the next president will have to deal with a U.S. growth rate that has now slowed to a run rate of about 1.5 percent. Any decline in stock prices, among other factors, could easily drive the U.S. economy into a recession as the consumer is the last buffer between expansion and contraction. The next president, far from preventing it, will be left to deal with it and the aftermath,” he wrote.
And he isn't alone in predicting that the winner of the contentious presidential race will ultimately have little effect on markets. One of the most beloved financial gurus bluntly says it doesn't really matter who wins the White House.
A Trump presidency wouldn’t be the blow to U.S. business that some fear, according to Warren Buffett, chairman and chief executive officer of Berkshire Hathaway Inc., Bloomberg reported.
“If either Donald Trump or Hillary Clinton becomes president, and one of them is very likely to be, I think Berkshire will continue to do fine,” Buffett, 85, said at the company’s annual shareholders meeting in Omaha, Nebraska.
The outcome of November’s presidential election is unlikely to change the fact that the U.S. is a “remarkably attractive place in which to conduct a business,” said Buffett, who endorsed Democrat Clinton at an Omaha rally in December. U.S. companies have enjoyed “terrific” returns on equity despite a sustained period of ultra-low interest rates, he added.
Buffett, who has criticized Trump in the past and scorned politicians’ pessimism about the country, looked past the current voter angst for a longer view of U.S. economic prospects.
“Twenty years from now, there’ll be far more output per capita in the United States in real terms than there is now. In 50 years, it’ll be far more,” Buffett said. “No presidential candidate or president is going to end that. They can shape it in ways that are good or bad, but they can’t end it.”
(Newsmax wire services contributed to this report).
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