Biden's Rise Spooks Wall Street. But its Donors Back Him Over Trump

Joe Biden's ascendancy in the polls and the prospect of Democrats sweeping Congress as they take the White House is spooking Wall Street investors, according to multiple reports. But donors from the financial world are still backing Biden more than President Donald Trump.

Trump's approval rating is now so bad, and Biden's lead so strong, that Senate Republicans up for election this year are beginning to fear the president's performance is a heavy weight on their own chances, and, if things get much worse, they may also lose control of the upper chamber.

A quarterly Citigroup survey of 140 fund managers released last week found that 62 percent expect Biden to win in November, up from 70 percent anticipating a Trump victory back in December, a near-total reversal of views amid the coronavirus pandemic.

The financial markets have boomed under Trump. He slashed their taxes and his administration had until the pandemic overseen a period of strong economic growth. The Federal Reserve's ultra-low interest rates also fueled the financial markets.

But Biden is standing on a platform that promises to raise taxes on wealthy households and corporations, and repeal the Trump reforms under the Tax Cuts and Jobs Act 2017. Many on Wall Street appear resigned to a Biden victory in November—at the very least.

"This country wasn't built by Wall Street bankers and CEOs and hedge fund managers. It was built by the American middle class," Biden has said, and his campaign uses Wall Street as a rhetorical symbol of the perceived greed that afflicts the wealthy at the expense of everyone else.

In an Axios report, Kace Capital Advisors managing director Kenny Polcari said "talk of a Democratic sweep [is] now common" among investors. Stephen Gallagher, chief U.S. economist at Société Générale, also told Axios that a Biden win looks "more and more certain."

Gallagher said markets were previously driven by Trump's $1.5 trillion tax cuts: "Now we have to position ourselves to look for some reversal of that."

"The market is starting to worry that Trump will not be reelected," Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets, told The New York Times. "Trump is consistently viewed as a positive for the stock market."

Tax is only one, albeit important, area that a Biden presidency could have a substantial impact on financial markets. But there are others. He is also pledging to put emphasis back on clean and green energy, for example; a potential boon for firms operating in that sphere, but bad news for fossil fuel giants.

Kristina Hooper, chief global markets strategist for Invesco, said a Biden presidency would represent "a real about-face for clean energy compared to the Trump administration," the Financial Times reported.

Still, despite any concerns, the lion's share of Wall Street political donations are going to the presumptive Democratic nominee, not Trump. Lobbyists are pragmatic about their interests and like to back a winner. And Biden, on current trends, looks like a winner-in-waiting.

According to data compiled by the transparency group Center for Responsive Politics, Biden raised a combined $52.4 million from the finance, insurance, and real estate industries to support his campaign. And $32.2 million of that is from the securities and investment sector.

Trump, a real estate billionaire, is almost $20 million behind. The Republican incumbent has raised $33.5 million towards his reelection campaign from the finance, insurance, and real estate industries. Of that, only $7.8 million came from securities and investment.

The Biden and Trump campaigns have been asked for comment.

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Democratic presidential candidate former Vice President Joe Biden speaks during a campaign event June 30, 2020 at Alexis I. Dupont High School in Wilmington, Delaware. Alex Wong/Getty Images