Tags: 2020 Elections | mark mobius | stocks | trump | presidency

Mark Mobius: Stocks Will Have 'Real Problems' If Trump Loses Presidency


By    |   Monday, 02 November 2020 06:40 PM

Investment guru Mark Mobius recently warned that U.S. and global stocks will have "real problems" if Donald Trump loses the presidency.

When asked recently on Bloomberg TV if the U.S. stock market is sustainable at its current high valuation, Mobius said: "I think it is, and this is not a political statement. I'm just stating the fact- if Trump gets in, then it's sustainable. If not, then we have real problems."

Mobius also said that Joe Biden's proposed tax increases will be bad for U.S. markets. "A lot depends on what Biden does, if he follows through on the policy to increase taxes in many areas of the US, particularly for the middle class, that would be bad for the U.S. market," the investor said. "That means U.S. imports will suffer, and that of course will impact these Asian countries that do a lot of exports."

Mobius said a Biden victory could help markets in Asia over the longer term, but not if the U.S. economy slows.

"A slow U.S. economy can't be good for these countries, so this is something we have to watch carefully," said Mobius. "Of course, the global market is expanding, and that will take some of the slack, but nothing can beat the size of the U.S. market," Mobius said.

"With interest rates the way they are, stocks can continue to move ahead the way they've done over the last few years. I look at some of these stocks and you see they've increased, it's just incredible."

Meanwhile, stock market participants largely expect short-term volatility and the likelihood of major long-term policy shifts related to taxes, government spending, trade and regulation. The longer-term moves will depend on whether Republican President Donald Trump or his Democratic challenger Joe Biden wins the White House race, Reuters said.

Biden leads in national opinion polls, but races are tight in battleground states that could tip the election to Trump. Analysts said the outcome most likely to shake equity markets in the near term would be no clear winner on Tuesday night.

Investors betting on a Biden administration, which is expected to deliver a massive fiscal stimulus and promote green energy, have fueled a rally in solar stocks, industrials and small-cap names in recent weeks.

On the other hand, JP Morgan has listed Bank of America , Wells Fargo and Citigroup in its "Trump basket" of stocks. 

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Investment guru Mark Mobius recently warned that U.S. and global stocks will have "real problems" if Donald Trump loses the presidency.
mark mobius, stocks, trump, presidency
Monday, 02 November 2020 06:40 PM
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