Steve Eisman, the ‘Big Short’ investor and senior portfolio manager at Neuberger Berman, has thrown a curveball in the 2024 election prediction game. After President Joe Biden dropped out of the race, Eisman, who previously predicted a Trump victory, announced he’s withdrawing his forecast. He admitted to being completely in the dark about the outcome, saying he has “no idea” who will win with Vice President Kamala Harris now leading the Democratic ticket.
Eisman’s shift in stance reflects the heightened uncertainty surrounding the upcoming election and its potential impact on the market. In an interview with Bloomberg Television, he outlined his concerns: a Democratic sweep of the White House and Congress could send the market plummeting, while a Harris victory without a full Democratic sweep might have a less drastic impact. However, he still believes a Trump victory would lead to a surge in stock prices, driven by anticipated tax cuts.
Eisman’s prediction shift comes as investors navigate a volatile landscape, grappling with economic uncertainty, changes in Federal Reserve policy, and the looming election – all factors driving a heightened demand for hedging and diversification. The market remains divided on the election’s impact, with some analysts anticipating a positive outcome under a Trump administration while others express concerns about the potential for a volatile market under Harris.
While Eisman has pulled back from making predictions, other analysts are weighing in. Election forecaster and historian Allan Lichtman, using his 13-key point system, predicts a Harris victory with eight points in her favor, three for Trump, and two undecided. Meanwhile, a Morning Consult poll of likely voters suggests a growing lead for Harris after the presidential debate. However, a CNBC survey revealed that a majority of investors (67%) believe a Trump victory would be more favorable for the stock market, referencing the strong performance of the S&P 500 and Nasdaq during his presidency. Trump himself has even suggested a potential market crash similar to 1929 if Harris wins the election.
Ultimately, Eisman’s decision to withdraw his prediction highlights the unprecedented uncertainty surrounding the 2024 election and its potential implications for the market. As the election nears, the focus will remain on the candidates’ policies and the potential economic impact of their respective administrations.
