On October 25, CNBC reported that billionaire investor George Soros has weighed in on the 2020 presidential race. Referring to Elizabeth Warren, he told the New York Times, “She has emerged as the clear-cut person to beat.” He also called her the “most qualified to be president.”
Soros emphasized that his statement is not an endorsement. In June, Soros voluntarily agreed to pay higher taxes. Warren has proposed higher taxes on wealthy Americans.
According to RealClear Politics, Elizabeth Warren ranks second among the Democratic presidential candidates. The survey reflects 27.5% support for Joe Biden. The survey noted that Warren’s support lags Biden by 5.8 percentage points.
Soros’ views on Trump
A long-time Democrat, Soros criticized President Trump on his foreign policies. In the New York Times interview, Soros suggested that Trump’s decision to pull US troops out of Syria was a mistake. He opined that this action “has been devastating for America’s influence in the world.”
Democrats also criticized Trump’s decision to abandon the Kurds in the Syrian region. Although Warren supported Trump’s decision to withdraw US forces, she called the withdrawal “reckless and unplanned.”
Notably, differences are growing in the Trump administration over phase one of the US-China trade deal. CNBC reported the presidential trade adviser Peter Navarro’s disagreement over the new deal, which omitted crucial IPR (intellectual property rights) clauses. For more on this topic, please read US Accuses China of IPR Violations, Shakes Trade Deal.
On September 10, Soros noted that he appreciated Trump’s policy on China, calling it “coherent and genuinely bipartisan.” He added that it was “the greatest — and perhaps only — foreign policy accomplishment of the Trump administration.” However, he advised Trump’s administration to avoid using Huawei as a bargaining chip in trade talks.
Wall Street’s views on Elizabeth Warren
However, Wall Street investors are divided on Elizabeth Warren, particularly with respect to her tax plans. Of particular concern is the possibility that those plans might lead to a correction in the equity market.
Omega Advisors CEO Leon Cooperman has expressed concern over the proposed wealth taxes. The fund’s AUM (assets under management) is over $1 billion. Please read Leon Cooperman: Trump Is Better than Elizabeth Warren! to learn more about his views.
On October 24, billionaire Michael Novogratz discussed Warren’s candidacy with CNBC, saying, “She could win the election because she’s smart.” The former hedge fund manager added, “She seems to be the best candidate on the stump.” The co-founder of PIMCO, investor Bill Gross also sees a win for Warren in 2020.
Warren and the stock market
According to a CNBC report, some Democratic donors warned that they would support Trump if Warren wins the presidential nomination. Warren has stated that she plans to increase taxes on large corporations. Under this plan, every dollar earned in excess of $100 million in profit would be taxed at a rate of 7%.
Warren also pledged to roll back Trump’s Tax Cuts and Jobs Act of 2017. For example, she alleged that Wells Fargo received billions of dollars in benefits as a result of this legislation.
In September, the US unemployment rate fell to 3.5%, the lowest in the last 50 years. Trump’s fiscal stimulus is one of the key factors behind the country’s lower unemployment rates. Moreover, his tax plan helped boost the stock market.
On October 28, the S&P 500 index was at an all-time high. Economist Robert Shiller suggested that Trump’s pro-business agenda is a wall against recession. The Nobel Laureate also believed that Trump could bring further growth to the economy.
A look at Soros’s holdings
The SPDR S&P 500 ETF Trust put option constitutes 7.7% of Soros Fund Management, which George Soros founded. The put option would save the portfolio if the equity market declines. Some economists believe the equity market could decline if Warren wins the 2020 presidential election.
The Invesco QQQ Trust (QQQ) was Soros Fund Management’s top buy in Q2 2019. Around 44.5% of QQQ invests in high-growth technology stocks. Alphabet (GOOGL), eBay (EBAY), Symantec (SYMC), and Red Hat (RHT) were alsothe firm’s top buys in the second quarter.