Stock trading and financial markets are influenced by governmental norms as well as political events. Super Tuesday held on March 3rd in the US, has stock brokers, traders and investors more on edge than in prior years. On Super Tuesday, the most delegates to the presidential nomination convention can be won, amounting to approximately a third of all delegates.
So why should investors be concerned? Some investors and analysts believe that a Sanders victory will disturb the stock markets. Sanders can possibly leave Super Tuesday with over 400 delegates, as per polling data. That would be nearly twice as much as Joe Biden, with around a third of all the Democratic delegates available for the taking on Super Tuesday. Investors are told to prepare for a possible Sanders steamroll and its effect on the portfolios they hold.
Why the Sanders Fear?
Why do the markets fear Sanders? Perhaps it’s because he supports reduced military spending, something that has risen under the current administration. As a result, Goldman Sachs is recommending buying put options on the defense stocks as insulation from any declines the sector may witness and any potential volatility. Sanders has not been exactly pro corporations and the increased marginal tax rates and greater government spending that Sanders seems to support could also be viewed negatively by the market.
Market Already Under Pressure from Coronavirus
With the challenges the market is currently facing, Super Tuesday is not what the market needs right now. The coronavirus epidemic has already put the markets under a lot of pressure. As the effects of the coronavirus fears stabilize, Super Tuesday now presents a new market challenge.