Could COVID-19 boost Biden’s chances in US election?
While the world is panicking with what is happening with COVID-19, it can be easy to forget the US Presidential election is just eight months away but the turbulence could be a benefit for Democratic nominee Joe Biden.
Biden was currently leading the Democratic Party presidential primary against Bernie Sanders, who is campaigning on an anti-establishment mandate which favours policies such as the abolition of private health insurance and breaking up the tech giants, and is tipped to win the nomination.
A presidential candidate to run against Republican Donald Trump was due to be chosen at the Democratic convention in July, 2020.
Russell Investments said: “The economic turmoil caused by COVID-19 means Biden may have a better chance of beating Trump in the November election. A Biden-versus-Trump contest likely will be neutral for markets.
“A Sanders-versus-Trump election would have been an additional worry-point, creating uncertainty about the strength of the eventual market rebound.”
Shane Oliver, chief economist at AMP, said: “The good news is that moderate Joe Biden continues to consolidate his position as a front runner for the Democrat nomination. While he may want to raise corporate taxes, his steady hand may be seen as welcome by markets through periods like the present and in general he is seen as business friendly.”
One of Sanders’ biggest campaign policies was the introduction of universal healthcare Medicare for All and the abolition of private health insurance but Regina Borromeo, senior portfolio manager for global macro at Robeco, said this would be a negative for health companies.
“Medicare for All would have a high material negative impact on pharmaceutical, dialysis and medical device names, along with healthcare insurance. And it would have a moderately negative impact on medical equipment and supplies.”
The turbulence had also worked against President Donald Trump who had been criticised for his handling of the crisis, most recently saying he wanted the lockdown to end by Easter. He would also be criticised if the US fell into a recession, a situation that is looking likely as US stockmarkets plummet. There had so far been 82,000 cases of COVID-19 in the United States.
“The big and rapidly growing risk for President Trump is that the US economy slides into a recession that combines with his policy failure that allowed around 30 million Americans to go without health insurance ahead of a health crisis to see him lose the election,” said Oliver.
Performance of S&P 500, NASDAQ and Dow Jones since start of 2020 to 26 March
AUTHOR
Laura Dew
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