Warren and Wall Street

As Senator Elizabeth Warren becomes the Democratic front runner, there are increasing concerns being expressed by Democrats on Wall Street. CNBC has a lead article today with the following headline: “Wall Street Democratic donors warn the party: We’ll sit out, or back Trump, if you nominate Elizabeth Warren.” Wall Street backed Hillary Clinton and Barack Obama by a wide margin, but Warren’s anti-bank, anti-private equity and anti-capitalist rhetoric has Democratic employees of financial firms wondering how they can vote for a candidate so hostile to their profession. We think this concern highlights the struggle that Warren will have in the general election. While Warren will energize the progressive wing of the party, she risks losing the center suburban voter, particularly those in the financial industry, who are not necessarily supportive of Trump but may conclude that Warren is a step too far and at odds with their own financial well being. While we believe Warren is the likely Democratic Presidential candidate, we don’t believe that she is a particularly strong general election candidate. Indeed, with the possible exception of Bernie Sanders, we think she is the least likely of all the major Democratic candidates to defeat Trump next year.