A wealthy hedge fund manager warned that the U.S. stock market could take a major hit if a socialist were to be elected president in 2020.
“If a socialist is elected, the market will sell off BIG,” Steven Gidumal, managing partner of Virtus Capital, said according to CNBC. “Pick a socialist - Bernie, Liz, Pete, etc. and the market would sell off.”
Gidumal, who has managed hundreds of millions of dollars during his career on Wall Street, is the type of business leader 2020 Democratic candidate Massachusetts Sen. Elizabeth Warren has railed against on the campaign trail.
She has vowed to make top Wall Street executives pay "their fair share" in taxes and has proposed using a wealth tax to pay for public programs. After criticism from more moderate Democrats, Warren claimed during a recent debate she "[does not] have a beef with billionaires."
President Trump's reelection campaign is expected to tout a relatively strong economy in 2020 and rely on a pro-capitalist sentiment expressed by people such as Gidumal.
“One of the best things the administration has done across all the parties is jawboning the [Federal Reserve] to keep interest rates down," Gidumal said.
During a campaign rally earlier this year, Trump claimed everyday Americans "have" to vote for him because their "401ks depend on it."
Some economists have warned that a recession could hurt Trump's reelection bid. Gidumal said any such downturn would "probably hit in the first quarter of 2021.”
“I think Trump is absolutely right to bash the Fed and to do it publicly because a lot of what they do is irrational and has been for the past century,” he said.
