The presidential election this November is coming into investors’ peripheral vision. It is not yet an overriding concern, but consideration is being given to the potential impact on public policy under a variety of alternative outcomes. The Lonely Bull has no more insight as to who our president will be for the next four years than anyone else. He also does not have insight into the complexion of our next Congress. He can, however, gauge from market action what the likely response from investors will be.
Even though current polling indicates a significant lead for Joe Biden, the challenger, it is difficult to discern any real negative concern from investors. It could be that it is still early or that polls were so wrong in the previous election that they are not taken seriously. Another possibility is that investors are ambivalent as to the outcome.
A Biden administration may not be feared. Policy changes during the current health and economic crises are likely to be gradual and not dramatic. There just is not much room for major changes; alternatives are hemmed in by circumstances. Historically the stock market has performed well under Democrat lead administrations. So, not having perfect insight as to the future, the present can give us clues and, so far, they are not alarming. Stay steady, my friends.
The Lonely Bull