President Joe Biden endorses Kamala Harris in heated presidential race
President Joe Biden has endorsed his vice president, Kamala Harris, to become the Democratic nominee for president.
NEW YORK — U.S. President Joe Biden ended his reelection campaign on Sunday after fellow Democrats lost faith in his mental acuity and ability to beat Donald Trump, leaving the presidential race in uncharted territory.
Here are comments from investors:
DAVID WAGNER, PORTFOLIO MANAGER AT APTUS CAPITAL ADVISORS LLC, FAIRHOPE, ALABAMA:
“We may see a bit of reversal in what has worked in the market over the last two weeks, with smaller capitalization stocks running, but by no means would I expect the market to give all those gains up.
“The bigger event for the market will be who will be in the ticket for Democrats because their policies and regulation ideas would be more impactful.
“Biden endorsed Harris, but I think they’ll be a lot of cooks in the kitchen over the next two weeks vying for the position – I believe it’s wide open.”
GUY LEBAS, CHIEF FIXED INCOME STRATEGIST, JANNEY MONTGOMERY SCOTT:
“It’s unclear at this point how Biden’s stepping aside will affect markets. In no small part that’s because we don’t know much of how a Harris administration would differ from a Biden 2.0 in terms of economic policy.”
ELLIS PHIFER, MARKET STRATEGIST, RAYMOND JAMES:
“I think any time you create this kind of change it creates uncertainty.
“This could be taken negatively in terms of higher deficits. In my opinion, we have two fiscally irresponsible parties.
“Tomorrow, I think ends up with the bond market probably on the negative side.”
ART HOGAN, CHIEF MARKET STRATEGIST, B. RILEY WEALTH:
” As it pertains to the ‘Trump trade,’ I would offer up that the Trump trade has been indistinguishable from a significant mean reversion in small caps predicated on the Fed likely cutting rates in September and Treasuries seeing a significant drawdown in yields.
“Of course, we will have to wait until Monday, but my gut tells me that this is a less of a surprise for markets, which have been a significantly efficient forward pricing mechanism.”
QUINCY KROSBY, CHIEF GLOBAL STRATEGIST, LPL FINANCIAL, CHARLOTTE, NORTH CAROLINA:
“This was expected. It was really an issue of not if but when, and now the next stage is who will it be. The question is, does his endorsement carry for Vice President Harris? Obviously the Vice President would be the easiest route. But there were so many comments from leading Democrats seeking a more open process for a nominee. The market is going to navigate through this.
MARC OSTWALD, CHIEF ECONOMIST & GLOBAL STRATEGIST, ADM INVESTOR SERVICES, LONDON:
“I think it helps to remind people that – and this is probably the more important point – how does this change the outlook for the Congressional vote? Because there was quite possibly the GOP getting a clean sweep, simply because a lot of people would have been saying ‘if that’s all (the Democrats) have to offer, then no thank you and let’s hand it all over to the Republicans and to Trump.’
“This may change that particular perspective. Both races are going to be close, there’s no question about that. But that is actually very material to the outlook for the U.S. dollar, for the U.S. deficit, because it’s about legislation and passing legislation.”
BILL STRAZZULLO, CHIEF MARKETS STRATEGIST, BELL CURVE TRADING, BOSTON:
“Looks like Kamala Harris is going to be the Democratic nominee, a former prosecutor against somebody who has 34 felony convictions. It’s fantastic. It’s great for the country because to me all the things were going through marketwise – potential slowdown of the economy, persistent inflation, the questions about what the Fed’s going to do – all that stuff is trivial in comparison to what the damage would be of a second Trump administration. Whether it’s his crazy economic policies across the board, tariffs, his just basically abandoning of Ukraine and how destabilizing that would be in in Europe.
“He has no interest in defending Taiwan. I mean, the economy, the markets and the world would be thrown into just utter chaos with him.”
JAMES KOUTOULAS, CEO AT HEDGE FUND TYPHON CAPITAL MANAGEMENT:
“I think you’ll see a little more volatility just because it’s added uncertainty. Trump is still a very strong favorite to win, but Biden was so awful any replacement has a slightly higher chance to beat him.”
MICHAEL BROWN, SENIOR MARKET ANALYST, PEPPERSTONE, LONDON:
“I would imagine we will see a knee-jerk risk-off move, purely as a result of that increased uncertainty. By and large, we’re still four months out from the election. So perhaps one of the biggest takeaways is people are going to start thinking about the election a hell of a lot earlier than we’ve seen in prior political cycles.”
GENNADIY GOLDBERG, INTEREST RATES STRATEGIST, TD SECURITIES, NEW YORK
“A lot will depend on who the party puts forward as the vice president candidate (assuming Harris is the pick to replace Biden.)
“Kamala Harris may not do any better than Biden. Right now nothing is certain.
“The next few hours are going to help determine how the market opens. I suspect (the Treasury curve) will bear steepen. But if it looks like the anticipated ticket is enough to actually beat Trump, that might actually be good for yields.”
MATTHEW GOTLIN, CHIEF INVESTMENT OFFICER & MANAGING DIRECTOR, WEALTH MANAGEMENT, CHOREO, MARYLAND:
“Markets do tend to hate uncertainty. You would unquestionably expect more short term volatility heading into November, especially as we wait to see who the democratic candidate will be.
“The election is a very emotional thing, but in the markets, things like profits will matter more over the longer-term.”
RICK MECKLER, PARTNER, CHERRY LANE INVESTMENTS, NEW VERNON, NEW JERSEY:
“It certainly was something that was already being factored into the minds of investors. It does represent, though, a tremendous amount of uncertainty both in terms of who the candidate will be, although it’s likely to be the Vice President.
‘My intention is to earn and win’: Harris seeks Dem nomination after Biden drops out
“Certainly if it is the Vice President, it probably reflects a continuation of current Democratic economic policies and so it doesn’t really change much in terms of investors’ views and how the market will react and what it’s likely to face.
“Unpredictability in politics has never been a huge positive for markets, but in this case, because it’s long been anticipated, I don’t think the reaction is going to be very immediate.”
BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, BROOKFIELD, WI:
“This is a contest once again. If Biden stayed in, the odds would have increasingly tilted not only in favor of Trump winning, but of there being a Republican sweep. Now it’s race again. The Trump-Trade will likely take a breather as investors reassess the odds of the outcome. That means small caps, financials, energy, and crypto could see a little pullback, but Trump still has the edge.”
JACK MCINTYRE, PORTFOLIO MANAGER, GLOBAL FIXED INCOME, BRANDYWINE GLOBAL INVESTMENT MANAGEMENT:
“I think overall this is going to be at least temporarily positive for markets…It’s probably going to be a positive for the bond market, especially given just where we are in the business cycle and more importantly, where we are with growth, inflation.
“I suspect that if this moves us toward getting divided government, that is a positive for the market.”
JAMIE COX, MANAGING PARTNER, HARRIS FINANCIAL GROUP, RICHMOND, VA:
“The question of who is going to be the nominee is going to re-enter investors’ minds in a very big way.”
“Markets are going to be terribly volatile until the Democrat nominee is known. That will likely manifest itself through the dollar, creating volatility in fixed income and equities.”
GINA BOLVIN, PRESIDENT OF BOLVIN WEALTH MANAGEMENT GROUP
“Biden stepping down is a whole new level of political uncertainty. This may be the catalyst for market volatility that is overdue.”
RHONA O’CONNELL, HEAD OF MARKET ANALYSIS – EMEA & ASIA – STONEX, LONDON:
“My instinctive reaction is that everything in the short term remains up in the air, vis-a-vis the Democrat nomination, obviously. But it may well put some brakes on the Trump locomotive.
“As far as risk-off is concerned − tailwinds are stronger for gold, purely on this basis, than headwinds. Some uncertainty been taken away, by definition, as per above.”
“At least it points to a stronger opposition, to which is what every democracy should strive.”