How a Kamala Harris candidacy could wreak havoc on the stock market: ‘She’s not stable’
![President Biden endorsed Vice President Kamala Harris for the Democratic nomination after he dropped out of the 2024 presidential race.](https://theloadedgunn.com/wp-content/uploads/2024/07/How-a-Kamala-Harris-candidacy-could-wreak-havoc-on-the-780x470.jpg)
Predictions on Wall Street that Joe Biden would lose enough of his mental faculties so as to be forced out of the 2024 presidential race go back for more than a year.
Yes – it was becoming increasingly obvious to investors by early 2023 that the man had no business running the country, and even less business running for another term.
Now that he’s out, it’s a big political story but also a big market and economic one.
Markets hate uncertainty. One reason for last week’s selloff after the blue-chip Dow hit an all-time high, my sources say, was uncertainty about who former President Donald Trump and JD Vance will be running against.
That’s also why the Street was preparing for the worst of all worlds: that Biden – just before being officially nominated at next month’s Democratic National Convention – would drop out and endorse his inept vice president, Kamala Harris, who if you believe in the polls has a fighting chance to win the presidency.
Now, brace yourself for more market turbulence as investors try to predict a Democratic ticket and its chances of beating Trump.
“Conventional wisdom is Kamala can’t beat Trump,” one high net worth financial adviser told me on Sunday.
“I don’t see more upside in the market with Kamala at the top of the ticket, I can’t see the market liking her. She’s not stable.”
Yes – the next week is going to be an interesting spectacle. Among the questions you’ll be hearing in the coming days:
If Biden isn’t healthy enough to run for president, then how is he healthy enough to be president?
Why isn’t he handing the keys to the White House to Harris, the person he claims is qualified to replace him?
Which Democrats are going to ask for an open convention to sort all of this out?
But here’s where things get really dicey for investors. If you look at the polling, this race is far from over.
There is a Trump trade – people jumping into stocks and certain sectors of the market when it looked like he was a shoe-in for president and the GOP would take both houses after Biden’s horrible debate performance and his subsequent disastrous attempts to try and recover.
My trading sources noticed how investors last week began to take some profits on the Trump trade when it became clear that Biden was heading for the exit, particularly after coming down with COVID.
The wager: For all Biden’s weaknesses, he still wasn’t getting crushed, the polls show. Anyone the Dems put up would be better and have a shot at beating Trump, who has his own negatives we are all familiar with. The Dems could keep the House or maybe the Senate.
Should Dems keep one of the chambers of Congress, even if Harris loses to Trump, they would be able to allow Trump’s tax cuts to expire, so that will be factored in as well.
That would be bad for investments and the economy of course, given how left-leaning the Democratic Party has gone on all things economic no matter who they run.
Depriving the nation of Trump’s economic policies of lower corporate taxes and deregulation is bad for stocks, traders say. and that’s why you saw a broad-based sell off last week even as Trump seemed to be coasting to victory at the GOP convention.
The good news, on the other hand, is that the American people will have a choice between a formidable GOP ticket of Trump and Vance, and the Democrats offering two sentient human beings.
Harris will likely be at the top of the ticket, with a running mate (if you can believe the Wall Street-Democratic Party grapevine) along the lines of moderate Pennsylvania Gov. Josh Shapiro.
One of the reasons Biden finally caved is because his money machine dried up. That has changed. The American people will have a real election with well financed candidates who are also likely to finish their terms.
Now, my Wall Street Democratic sources say big donors are ready to spend whatever it takes to defeat Trump.
“Donors are ready to go heavy,” is how one top Wall Street executive affiliated with the Democratic Party told me just minutes after Biden made it official.
The bad news: Another top Wall Street Dem told me the plan isn’t just to anoint Harris but for “an open convention to Democratic Party.” Sounds enticing given Harris’ weaknesses, but it’s a recipe for chaos.
And again – the Wall Street research I mentioned spelled this out more than a year ago, when the DC press corps was ignoring Biden’s obvious and continuing mental and physical decline.
In other words, this thing could get ugly.