Election: Blue Wave coming?

If so, what will the stock market do?

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.


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.


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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