No doubt, current global stock market for annual 2016 is in turmoil of economic crisis due to bullish dollar, bearish crude, hiking interest rates and unpredictable Chinese economy. What more could leash out a tension for money managers and their clients: Politics ofcourse!
The Republican presidential candidate, Donald Trump in his journey to create a pugnacious American Nation, announced to levy a 45% tax on Chinese imports in order to make Chinese goods more expensive so that American producers (who pay their workers more) could gain a competitive edge. Conversely, the matter is debatable. China for instance ships goods — television, furniture, garments, toys, iPhone etc. — to United States at US$500 billion/annual that of which makes an estimate of 1/4th of its imports.
“When you institute a tariff, the price goes up for consumers. People will also buy less. So consumers are hurt not just by rising prices, but by consuming less.” – Moody’s Analytics economist, Adam Ozimek
On a similar scenario, Bernie Sanders desires to tax short-term stock market TRADING along with raising federal minimum wages – aside an insentient rise in tax and regulations too.
In competition, polls for both candidates are hiking causing stock market to decline. Astonishing, isn’t it? Well, not exactly. Global stock market certainly does not prefer three kinds of situation: uncertainty, irrepressibility or anything that goes around opposing MBA economics orthodoxy.
In that case, what’s likely an ideal situation for voters – if they are investors, at any rate – to pick in one of those options of two heterodox outsiders? A choice of either of them would turn the cards in wrong direction – a beheading threat! In case both of them fit into an above mentioned three-scenario criterion. Even in Wall Street’s best-case scenario, the parties will only pick establishment candidates after months of bruising primary battles. The best way to boost U.S. growth is to encourage high-end innovation, not to fence off low-wage jobs that can be performed anywhere.
