Goldman Sachs: Coronavirus Could Cost Trump Re-Election
The coronavirus epidemic threatening to impact the United States could have political implications for President Donald Trump, Goldman Sachs warned investors on Wednesday, according to CNN.
"If the coronavirus epidemic materially affects US economic growth it may increase the likelihood of Democratic victory in the 2020 election," Goldman Sachs analysts wrote in a report.
The analysts noted that “economic growth during the second quarter of an election year has been a ‘key predictor’ of past presidential races,” CNN said. The news outlet also noted that this was the case when Bill Clinton ousted President George H.W. Bush in 1992.
The epidemic could usher in an economic slowdown, economists are warning, or even spark a recession. Where Moody’s Analytics chief economist Mark Zandi previously saw a 20 percent chance of recession in the first half of 2020, he now sees a 40 percent chance, CNN reported.
Until now, most on Wall Street have been comforted by Senator Bernie Sanders’ rise among the Democratic presidential candidates, believing Trump would do well against him come November.
Should the coronavirus lead to greater economic troubles, Trump’s chances of winning would likely decrease — leaving Wall Street to worry over the potential of a self-professed Democratic socialist in the White House.
Goldman Sachs is not so sure that Sanders would lose to Trump, however, writing in its most recent report: "In contrast with the prevailing market narrative, head-to-head polls show Senator Sanders would be competitive against President Trump in the general election.”