Would the market fare better under a PresidentDonald Trump or a President Hillary Clinton?
Thatâs the question investors of all kinds are asking now that Trump and Clinton are the presumptive nominees.
The answer, according to some of the nationâs top market experts: President Clinton. And, the reason can be summed up in two words: trade war.
âI think expectations are that the economy would do better under a Clinton presidency,â says Sam Stovall, managing director of S&P Global Market Intelligence. âSince she would take a less hostile position toward our trading partners, particularly China and Mexico, her administration could focus more on growth than protectionism.â
Others share this point of view. âAt this juncture, I believe the market would fare better under Clinton, in part, because we donât know enough about a Trump administration and the potential adverse consequences of trade wars,â says Bob Doll, senior portfolio manager at Nuveen Asset Management.
Meanwhile, another expert says Wall Street dislikes both candidates, but ultimately prefers Clinton. âFrom the financial markets’ standpoint, the choice between Clinton and Trump is really a choice between the lesser of two evils,â says Bob Johnson, the president and CEO of the American College of Financial Services. âNeither candidate is an attractive candidate from the perspective of Wall Street.â
Johnson speculated that if one were to poll Wall Street the results would likely show even higher disapproval ratings than the current nationwide polls show for each candidate. Â âThe only consolation is that Wall Street would regard Bernie Sanders as an even worse candidate,â Johnson says.
Still, Johnson says, there is little doubt, however, that market participants would rather see a Clinton presidency than a Trump victory. âMarket participants believe they know more about her positions and that a Clinton presidency wouldn’t represent a radical departure from the current regime,â says Johnson. âThere is a time-worn adage â âthe markets dislike uncertainty,â and Trump epitomizes uncertainty.â
Johnson recited some of the uncertainty that comes with a President Trump: âTrump has advocated some outlandish positions, including suggesting that the U.S. might be able to ârenegotiateâ terms of the debt â essentially paying creditors less than 100 cents on the dollar,â he says. âHeâs said he would repeal trade deals, deport MexicansÂ and punish corporations that move outside the U.S. All of these actions would destabilize the financial markets.â