Investors have spoken. They are looking forward to at least two years of gridlock in Washington. The stock market rallied strongly following election day (even before the Pfizer/COVID news). While it’s always dangerous to attribute stock market movements to any one thing, I believe that investors like the prospect of a divided government.
I think we know what we are going to get with a divided government, which is to say there will be no major changes. Why is that good? It gives companies two years to plan with relative certainty. They haven’t had that in a while.
I’m optimistic that both parties can agree to any no-brainer improvements that need to be done over the next two years. It would be great if they could find some middle ground to work together on things, but I don’t think that’s likely. I’ll settle for nothing too disruptive. The market seems to agree.
p.s. Yes, it seems likely that Georgia’s senate seats are going to a run-off. My best guess is at least one of them goes to a Republican.
About the Author: John O’Connor
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