Mark Mobius Says Biden Is Bad For US Stocks, Good For Others


A Joe Biden presidency will be negative for stocks in the US and positive for other markets given his plans to raise taxes on companies and wealthy Americans, according to veteran investor Mark Mobius.

Biden’s tax increases will reduce the incentive for people to invest in the US market, said Mobius, who created Mobius Capital Partners after three decades at Franklin Templeton Investments. That “will be good for emerging markets and other global stocks, as there will be a withdrawal from the US market,” he said in an interview emailed on Friday.

Mobius’ comments about Biden come as the Democrat moves closer to ousting President Donald Trump in the White House, and this week’s rally in global equities shows signs of stagnation. The MSCI All Country World Index was little changed on Friday, after advancing on each of the previous four days. That rally has brought the indicator close to levels where it has faced resistance twice since August.

“The so-called wealth effect will be at play” in the United States, Mobius said. “If people who invest in the stock market expect their wealth to suffer from higher taxes, they will refrain from investing.”

His views contrast with some global investors who have said that Biden will not be able to easily raise taxes with a potentially divided Congress. The S&P 500 Index is up more than 7% this week, set for the best weekly gain since April. The Nasdaq 100 indicator has risen further, reflecting expectations of potentially higher capital gains tax removal.

Meanwhile, Trump has questioned the credibility of the election and his campaign has peppered the courts with legal complaints.

A controversial result will also add “more uncertainty” to the outlook for US equities, Mobius said. “Biden’s program is to tax the ‘rich,’ that is, people who earn more than, say, $ 200,000 a year. Most active in the stock market.”

This story has been published from a news agency feed with no changes to the text. Only the title has been changed.

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