Despite the corona pandemic, the stock markets are booming. Crypto investor Novogratz assumes that a defeat of Trump in the presidential election will change that.
You can't have it all: While some Wall Street greats are hoping for Joe Biden to triumph in the upcoming US presidential election, that victory could mean the end of the stock market rally. Investor Michael Novogratz, who has invested a lot of money in crypto currencies and is considered the star of the scene, is also convinced of this. "A win for Biden and [Vice-Presidential Candidate Kamala] Harris would be great for the country, but not so great for the stock market," he told financial news agency Bloomberg.
Novogratz expects the current "stock market madness" to be ended by the politics of the Democrats. Because if they prevail against Trump and his Republicans in November, Wall Street would have to adjust to higher corporate and capital gains taxes. Taxes are also likely to rise for the rich.
Since the slump in March, the US benchmark index S&P 500 has risen by around 40 percent. The stock market is in an ecstasy caused by liquidity, according to the investor, who, according to Bloomberg, describes himself politically as "left of center". That means: Many investors currently see little alternative to stocks. Interest rates are extremely low and investors have to invest their money somewhere. So capital is constantly flowing into the stock market in order to benefit from price gains.
Price drivers are companies like Amazon and Tesla, says Novogratz. "Amazon is a great company and it is doing well against the backdrop of the corona pandemic. But it is trading for a hundred times its profit," said the investor.
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