Election: Blue Wave coming?

If so, what will the stock market do?
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Interesting analysis from B of A brain trust, channeled thru ZeroHedge

First, the betting markets are still indicating slightly better than even odds of a Blue Wave — Biden wins, Dems win Senate & House.

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Surprising (to me, at least), the B of A analysts conclude that a Blue Wave would be good for the stock market.

The essence of their argument…

In the short-run, Dems would spend like drunken sailors … spiking the economy.

In the long-run, higher taxes would dampen the economy but Dems will likely rein in their tax & spend proclivities to keep from getting blown out in the mid-term elections.

The argument strikes me as a sales pitch to buoy the stock market more than a serious analysis.

On the flipside, they argue that either a Trump win or a GOP Senate will lead to a gridlock-induced stagflation.

I’m not for stagflation, but I’ve always been pretty comfortable with gridlock …

My view: Most of what gets enacted by Congress seems to make my life worse, not better. Viva gridlock.

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And, of course, there are Blue Sweep contrarians.

JPMorgan strategists see “an orderly Trump victory as the most favorable outcome for equities (upside to ~3,900).”

Place your bet…

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