Primary Day in the Northeast!

Weekly thoughts on a variety of issues impacting investor relations, the markets and the investment community, from Chris Taylor, EVP, Global Research, Thought Leadership & Partnerships

Primary Day in the Northeast! – Here’s Some Investment Community Feedback on the US Presidential Election

We all know how excruciatingly long the election cycle is for US President. The first of the Republican Party debates took place on August 6, 2015. If you recall there were 17 participants in that first debate, split unevenly into a main group of 10 and a secondary group of seven.  The first Democratic debate took place in mid-October and only included five potential candidates. In total, we’ve had 12 GOP debates and 9 debates by the Democrats. With today’s Republican and Democratic primaries in five northeast states, Connecticut, Delaware, Maryland, Pennsylvania and Rhode Island and “only” six+ months until the election, Ipreo thought it would be interesting to share some feedback from the buy side and the sell side regarding the impact of a win in November by a Republican or a Democratic candidate, and if the uncertainty around a Presidential election impacts the way they invest.

Our Perception Analytics team spoke with close to 25 buy siders (whose firms manage almost $2T in assets) and a handful of sell siders. The conversations took place prior to the recently completed New York primaries, which saw Hillary Clinton and Donald Trump cement their status as the front runners. While not a representative sample of the investment community, it’s clear the participants feel a victory by either of the parties’ insurgents–Trump or Sanders–would result in a negative market reaction, while a Clinton, Cruz or Kasich victory would sit well with the market.

  • In terms of market reaction, Hillary Clinton scored the highest on a combination of an expected “neutral” and “positive” reaction to her election at 79%;
  • Mrs. Clinton also had the lowest “negative” numbers at 14% (with the exception of John Kasich, who simply didn’t register in this category);
  • Bernie Sanders had the highest percentage of respondents who believe his election would result in a “negative” market reaction at 64%
  • Donald Trump was not far behind with a “negative” market reaction expected by 54% of the participants if he were elected;
  • A majority of participants thought Ted Cruz would be “positive” or “neutral” to the market if elected.

My colleague on Ipreo’s crack perception team, Preston Gelman, does a great job of summarizing the results and providing some verbatim quotes from a few of the participants. Enjoy and remember to vote…….November’s right around the corner!