Bank and crypto stocks do not speak in favor of the Democratic nominee, Stanley Druckenmiller claims
Markets have been indicating a Donald Trump victory in the upcoming US presidential election, according to American billionaire investor Stanley Druckenmiller in an interview with Bloomberg Television.
The founder of the Duquesne Family Office investment firm and hedge fund manager pointed out that this trend is evident in bank stocks, crypto, and even in the performance of the former president’s social media company, Trump Media & Technology Group.
“I would have to guess Trump is the favorite to win the election,” Druckenmiller told the news channel on Wednesday, highlighting that the market has appeared “very convinced Trump is going to win” over the past 12 days.
Druckenmiller, who managed investments for billionaire political activist and Democrat mega-donor George Soros for over a decade, also discussed the potential implications of a Trump victory if Republicans gain control of Congress. He stated that it is “extremely unlikely” for Democrats to seize control of Congress, even if Kamala Harris assumes the presidency.
The investor, who funded the primary campaign of former South Carolina Governor Nikki Haley against Trump earlier this year, also suggested that equities could face challenges for three to six months in the event of a so-called blue sweep, where Democrats win the Presidency, the Senate, and the House of Representatives. Druckenmiller added that a red sweep scenario is “probably more likely than a Trump presidency with a blue Congress.”
“Personally, I think anybody that votes for Trump is probably not going to change their ballot for a Democrat in Congress,” he added.
The money manager anticipates the Fed to adopt a more hawkish approach than it would under a Harris administration. He noted that the significant rate cut of 50 basis points in September was a mistake, adding that his investment firm shorted bonds, anticipating a decline in obligation prices, following the announcement. Druckenmiller emphasized the need for the market to moderate its expectations regarding the pace and extent of central bank easing.