The gulf's too great between candidates for you not to have a view of the winner, but we are too far from the election to have that view.
That was the pretty stunning conclusion of a panel I went to last night hosted by ETrade and TheStreet.com. To listen to the lack of common ground and to recognize the pure uncertainty of a Trump presidency is to understand that you can't really game him at all, except to sell anything that's related to commodities because of what would be an obvious trade war with China.
But if you think Clinton's going to win you have not one, but two variables. A simple victory means the coming pain of owning health care, because it's pretty clear that she would take her cue from the Big Three that are increasingly being acknowledge as the ne'erdowells: Mylan (MYL) , Teva (TEVA) and Valeant (VRX) , and establish as close to price controls on drug increases as possible.
Why these three? Because they are widely conceded to do both the most price increases and the least research and development. But the scrutiny would extend to the companies that do the research and development and the least price increases -- pretty much everyone else in the industry.
You would have to expect that she would raise capital gains taxes. It's already been in the cards. Another strike against the individual investor who's been fleeing anyway.
Worse, on a landslide, then Elisabeth Warren would be the most important finance person in this country and even though Hillary Clinton has accepted a huge amount of money from banks you can only imagine what kind of hell Warren could raise. Do you not think she would run a bank oversight committee that would call, for example, a moratorium on bank cross-selling because of the egregious wrongdoing at Wells Fargo (WFC) ?
How about Trump? Here's a man who wants a trade war, is literally courting a trade war with China. We forget how much commerce we do with China. They have a ton of companies that make phones in China. Ban Apple (AAPL) . They need capital equipment to mine and build roads and infrastructure: Ban Cummins (CMI) and Caterpillar (CAT) .
We sell a gigantic amount of all consumer packaged goods to China: ban Coca Cola (KO) , Pepsico (PEP) , Kimberly-Clark (KMB) , Colgate (CL) , Procter & Gamble (PG) . We have two big restaurant chains: Starbucks (SBUX) and KFC. Say goodbye to that revenue.
Does anyone think that our rails won't be affected? So much of our coal goes to China, and it's been part of a major turning point for the group. The airlines and the aircraft builders and all of their contractors would be crushed. So much for Boeing (BA) and United Technologies (UTX) , which has the added disadvantage of making and serving Otis elevators. Do you think the Communist Party cares about this stuff? You bet they do.
So many of our industrials would be impacted by this trade war.
But you can't necessarily hide in the domestic companies because, let's face it, the nationwide minimum wage would go up with Hillary for certain.
Then there are the corporate subsidies for clean energy. Tesla (TSLA) and SolarCity (SCTY) combined would be a Hillary special. I don't know how they could get the capital under Trump.
The only real common grounds discussed: defense gets more money, to which I say so what, those stocks have all been ridiculously elevated. And the Fed might be on hold before the election, something I am not even sure about.
Suffice it to say unless you get a clear winner going into November, the uncertainty would be incredible and as the panelists all agreed last night, uncertainty is the one thing we know above all that investors hate.
So keep in mind, when you see the volatility, that not all of it is the Fed -- where the panelists called for Fed head trading cards so we know where people stand and what their numbers are, they have become that important. A lot of it is the election and the lack of common ground, which could make for a treacherous couple of months until we get there.
