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Markets will breathe a ‘sigh of relief’ if Trump is re-elected, veteran strategist explains

Heidi Chung
·Reporter

Nuveen’s Bob Doll is among and Wall Street strategists warning that 2020 will be dominated by politics as a presidential election looms.

Doll argues that for markets, status quo in Washington would be well-received.

“Donald Trump [gets] re-elected, Democrats retain the House, Republicans retain the Senate— that’s the status quo, nothing changes,” he said on Yahoo Finance’s “The First Trade.”I think that will give the markets a sigh of relief. It will at least know what it will get, whether they like it or don’t like it.”

It was a record year for the stock market in 2019, but it might not be as great this year, Doll added.

“The odd thing this year’s the economy’s likely to be a bit better than last year, but the market’s probably not going to be as good. That’s a weird juxtaposition.”

PASADENA, CALIFORNIA - JANUARY 01: A fan dressed as Super Trump holds up a sign that reads, "Super Trump 2020 Keep America Great!" during third quarter in the Rose Bowl game presented by Northwestern Mutual between the Oregon Ducks and the Wisconsin Badgers at Rose Bowl on January 01, 2020 in Pasadena, California. (Photo by Kevork Djansezian/Getty Images)
A fan dressed as Super Trump holds up a sign that reads, "Super Trump 2020 Keep America Great!" (Photo by Kevork Djansezian/Getty Images)

The S&P 500 has been on a strong run since President Trump was elected into office on November 8, 2016 with stocks soaring a whopping 61%. While the market has liked President Trump and his administration, stocks will continue their run higher, whether or not he gets re-elected, Doll argued.

“Whether [Trump] gets elected, the bull market continues, in my view, unless and until we have a recession and there’s no sign of recession. None,” Doll said.

Aside from the election, there are still key overhangs on the market including the ongoing trade war between the U.S. and China and the rising tensions in the Middle East following a U.S. drone attack that killed a top Iranian general.

Doll doesn’t see an end in sight when it comes to the U.S.-China trade war, even as the two feuding sides look to ink a “phase one” deal on January 15 in Washington. “The Phase One deal means we’ve got 99 phases left if we’re going to solve all of the trade problems and could go on for years.”

Meanwhile, Iran remains a wildcard for the markets, according to Doll. “No question about it … Iran’s an issue. Market’s have basically ignored it as you know. I’m not sure that’s going to continue. But this one, like the China thing, is not new. We’ve been kind of fighting with Iran with words at a minimum for a long time. Let’s hope it doesn’t get a lot worse.”

Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.

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