The above of course is based on two major premises: That Ms. Warren wins the Democratic nomination and that Trump does not have the ability to restart the US economy.
I am 90% certain Joe Bidden will not be able to beat Trump in a one-on-one, but I am also aware most “commentators” believe Trump will beat Warren, but I suspect that, similar to the case during Trump’s own rise, their assumptions are based on old interpretation on what drives elections. Again, let me stress the importance of how elections go down: They are lost more than they are won.
Trump will likely be impeached but will not be removed from office as too many Republican senators will stand by him, but the process will take a lot of energy out of him. Meanwhile, the trade war and his never ending ‘playing loose with the facts’ will ultimately catch-up with him. Beating Biden might be possible, but beating Warren based on policy will be a test of how extreme the non-core Trump supporters are revolted by his behavior and record and secondarily, how far the marginal Democratic voter is motivated to get out and vote when the Democrats present such a new breed of candidate.
The market impact will be heavily negative for technology companies – the FANGS, but it will also play into our Q4 Outlook: The Killer Dollar as Warren, like Trump strongly advocates a weaker Dollar.
Overall, the next months will see Joe Biden’s candidacy wither away and when the momentum of Senator Warren’s rise is more clearly registered by the market, there will most likely be a repricing of technology stocks, and even the dollar. For now the consensus thinks that Biden can beat Trump but Warren can’t. But that consensus ignores the tectonic demographic and political shifts in the US, the fact that the US’ largest generation, unlike every single other Developed Market country outside of Canada, is the Millenenial generation, who are now the deciders if they are motivated to get out and rock the vote next November.