What Would a Pete Buttigieg Presidency Do to Stocks?

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A Pete Buttigieg presidency would do something similar to the stock market that a Bernie Sanders Presidency would do, minus one key ingredient:

Banking regualtion.

Let’s parse, shall we?

Buttigieg hope to make policy that would lower college tuition, create Medicare For All, include more affordable housing, lower prescription drug prices, boost social security and raise minimum wage to $15 an hour.

Okay, let’s not get fazed. Let’s go item by item.

This all requires a lot of spend. Buttigieg’s website shows that the full extent of his policies would include several trillions of dollars of government spend, a negative for the already large federal government deficit, which the economy ay need to tap into during a recession.

The spend also likely means higher taxes on corporations, which would immediately result in lowered earnings and stock prices.

Still, Buttigieg’s comment to Sanders during the Nevada debate, “do the math,” on taxes for ambitious spending suggests Buttigieg may be more pragmatic about executing policies, although that could also be political posturing.

Medicare for all is a negative for health insurers. Strategists expect volatility in the sector, although the full extent of the policy may no be pushed through congress and healthcare stocks already trade inexpensively because of this very issue.

Lower drug prices are a negative for drug makers and a probably slightly less negative for CVS and Walgreens.

The average minimum wage in the U.S. in 2019 was $7.25 an hour. Moving to $15 would seriously compress corporate operating margins at first, while hopefully boosting spending. That magnitude of change in policy is unlikely to fully be implemented. 

To see the main difference between a Buttigieg and Sanders presidency, see the quick video above. 

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