Legendary macro hedge fund manager Paul Tudor Jones says that the 2020 presidential election will be “more meaningful” for markets than any other election he’s lived through.
“As an investor, you have to have a view on the election because the outcomes are so extreme. I've never seen this kind of polarity in elections as we have now,” the 65-year-old billionaire hedge funder said at the Greenwich Economic Forum in Connecticut on Tuesday.
During his fireside chat, Jones referenced a poll his firm ran that found if Senator Elizabeth Warren (D-MA) were to win in 2020 the S&P would trade at 2,250, down 27% from current levels. The model found that if South Bend, Indiana, Mayor Pete Buttigieg and former vice president Joe Biden were to win, the S&P would trade at 2,700, or 12% lower. Meanwhile, if Trump were re-elected, the model round that the S&P would trade around 3,600, or an increase of 17%.
"It does make a difference," he said. "Ronald Reagan, when he became president, was a huge difference to the stock market. I would say who the next president is also going to have a huge impact on the economy, the stock market, particularly asset prices."
His view is that asset prices today priced off of a 5% budget deficit with "this incredibly overly stimulative fiscal policy combined with this overly stimulative monetary policy is creating this U.S. exceptionalism."
Jones believes that if the U.S. were to normalize its deficit to where Europe is right now there would be "completely different valuations" for the stock market and the U.S. dollar would be "substantially lower."
"This next presidential election and what policies they pursue afterward, I think this one is going to be more meaningful than certainly any more in my lifetime," he added.