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67% of investors say Trump is a better choice for the stock market than Biden, but market predictions vary
At a time when economic policy and market performance often intersect, a CNBC survey found that investors favor former President Donald Trump’s potential impact on the stock market.
The survey, which polled 400 investors, traders and fund managers, found that 67% believed Trump would benefit the stock market the most.
CNBC said the sentiment seems rooted in historical performance. During Trump’s four years in office, the S&P 500 soared 68% and the Nasdaq rose 137%. In contrast, so far under the Biden administration, the indexes have risen 44% and 34%, respectively.
However, the investment community is divided on the market’s near-term direction. The survey found that respondents were evenly split; one-third expected a decline, another third expected an increase, while the remaining third believed the market would move sideways.
This uncertainty reflects the factors that influence the current economic outlook. While presidential policies can influence market sentiment, other factors often play a larger role. As Kristina Hooper, chief global market strategist at Invesco, told The New York Times, “Markets are politically agnostic. And for good reason: It doesn’t matter.”
Much of the recent market gains can be attributed to investor enthusiasm for artificial intelligence (AI) rather than political developments. CNBC noted that Microsoft emerged as the leader in the AI race, with 50% of respondents believing that Microsoft is best positioned to capitalize on the technology. Surprisingly, Nvidia did not appear at the top of that list.
The Federal Reserve’s monetary policy decisions remain a factor. Two-thirds of respondents expect the central bank to cut interest rates by the end of the year (many expect a cut as soon as September), a move that could shake up markets.
Interestingly, despite the market’s clear Trump-leaning bias, investors expressed concerns about the current state of the major indices, with 80% of respondents admitting to being uncomfortable with the high concentration of tech stocks in the indices.
Besides stocks, the survey also highlighted India as the most attractive overseas market, followed by Japan and Europe. In the absence of stocks, corporate bonds emerged as the preferred investment vehicle.
As the 2024 election approaches, investors need to be aware that while presidential rhetoric often ties market performance to administration policy, the reality is much more nuanced. Historical data shows that markets generally trend higher regardless of which party occupies the White House.
Ultimately, as the survey results suggest, while investor sentiment may be tilting in favor of Trump for potential market gains, the stock market’s future path appears as unpredictable as ever.
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This article, “67% of investors say Trump is better for the stock market than Biden, but market predictions are all over the place,” originally appeared on Benzinga.com
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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