As soon as the news came out that the President had tested positive, the stock market’s futures went down and showed deep losses.
A futures contract is simply an agreement to buy something at a later date for a price set today. Futures contract for the stock market are traded when the markets are closed and are usually a good indicator of how the stock market will perform when it opens.
Without any surprises, most US Indices showed stark losses at market opening. While writing this article, the S&P 500 was down 84 basis points (-0.84%), while the NASDAQ composite was down 117 basis points (-1.17%).
These losses can be tied to the news that broke out around 12AM ET on Friday. Trump’s tweet announcing he and the FLOTUS tested positive was all it took to make futures contracts on the stock indices go negative.
This is only a brief glimpse at what a Joe Biden victory would look like. During the first presidential debate, Joe Biden did not oppose the idea of imposing a second lockdown on Americans.
The economic and social consequences of another lockdown would be disastrous. The New York region saw a 40% surge in bankruptcies and is now bracing for more. This is the result of a failure to properly isolate at-risk individuals.
Joe Biden’s plan to increase the corporate tax rate and to repeal the massive tax-cut offered by the Trump administration to all Americans, including middle-class households, would be catastrophic.
Biden’s proposed tax-hike is intended to please his radical “democratic socialist” base. The proposed hike would raise the corporate tax rate from 21% to 28%, weakening the US competitiveness in attracting foreign capital and investments.
In a post COVID world where the economy is already weakened, such tax-policy would likely push the national economy into a recession.
Biden’s complacency and affinity towards the socialist “Green New Deal”, a plan for a takeover of the American Economy, would cause disinvestment across the United States if Biden was elected in November.
Although Biden has been flip-flopping on the issue and denied embracing the Green New Deal during the last debate, Biden’s own website reads: “Biden believes the Green New Deal is a crucial framework for meeting the climate challenges we face.”
There’s a whole lot of economic and fiscal issues on Biden’s radical platform that would seriously hinder the United State’s economic recovery. But the greatest danger is not a fiscal one: Joe Biden’s cognitive abilities are weak.
Biden has been called ‘senile’ by numerous observers, and while this may be harsh, it does not appear to be entirely untrue. Biden has always been prone to gaffes, but in recent years, the confusion and lapses of memory have been rapidly multiplying.
A ‘senile’ President in the United States’ highest office would provide multiple occasions for maleficent foreign and domestic actors to strike or to take advantage of the country. This could transpire to the real economy.
The stock market is not a tool for the rich, it is where middle-class workers, teachers and hard-working Americans pensions grow. It is their retirement. The crash in the stock market that a Biden win in November would cause will affect each and every American.
Samuel Rz is an honours student in Finance at the John-Molson School of Business.