While polls predict a close race among the Democratic nominees Kamala Harris and Republican candidate Donald Trumpbillionaire investor and former hedge fund manager Stanley Druckenmillerthe chairman and CEO of Duquesne Family Officeexpressed his thoughts on the 2024 presidential elections on Thursday.
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What markets say: While Druckenmiller stated that things are still fluid, he said he was positive about the market indicators ahead of the election. In an interview with Bloomberg in 1980, the billionaire said the market was right on the former president Ronald Reagan despite what the experts said.
“And I have to say that over the last 12 days, the market and the inside of the market are very convinced that Trump is going to win. You can see it in the banking stocks, you can see it in crypto, you can even see it in Trump Media & Technology Group Corp. (NYSE:DJT), its social media company,” he said.
Industries that benefit from deregulation will benefit from a Trump victory and outperform others, Druckenmiller said.
Trump is now the favorite to win the election, the billionaire said, adding that the polls don’t mean much these days because no one even responds to them anymore.
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The scenarios: Druckenmiller has considered four scenarios, namely a blue one, a red one, the Trump administration with a blue branch of Congress and a Harris administration with a red branch of Congress.
A blue victory is extremely unlikely, the billionaire said, adding that even if Harris wins the presidency, looking at state-by-state polls, it appears Republicans will win the Senate.
If you got a blue sweep, you’d have a hard time for stocks for three to six months, Druckenmiller said. This will translate into the economy as equity ownership stands at 25% of financial assets, an all-time high, he added.
‘So that’s a blue smear. But the good or the bad news, depending on how you look at life, is highly unlikely,” said the ex-hedge fund manager.
A Red victory is probably more likely than a Trump presidency with a blue Congress, he said. This is because anyone who votes for Trump is unlikely to switch allegiance, he added.
“A red streak, I think you get animal spirits in business. You get deregulation and there can be some kind of improvement from where they were in terms of business,” Druckenmiller said. So I think the economy could potentially be stronger in the next three to six months, he said.
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The only fear is that because bond yields do not reflect a good economic outlook, there could be a bad reaction from fixed income markets, which could then extinguish the stock rally, the billionaire said. He also thinks the Federal Reserve will be more aggressive under a Trump administration and a red Congress.
On the contrary, under a Harris administration with a Republican Congress, not much change from the current landscape is likely expected, he said.
Trump vs. Harris: As for his personal preference, Druckenmiller said he hasn’t yet decided who he would vote for. “I don’t see my voting base voting for either of them,” he said, adding that they are actually united on some issues, such as industrial policy.
“They both think that government should apparently play an important role in allocating capital, which I think is bizarre, to be honest,” Druckenmiller said. Both have adopted industrial policies that have more or less pushed aside Reagan free-market capitalism and so their policies are equally bad, with Harris being much worse in terms of being anti-business, he added.
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This article Market ‘Very Confident’ Of A Trump Win, Says Stanley Druckenmiller: Why Billionaire Investor Thinks Blue Sweep Is ‘Highly Unlikely’ originally appeared on Benzinga.com
