Home Forums Hunting & Shooting Hunter's Campfire Stability

I always heard the stock market liked stability. What the hell is going on with it now?

Good question.

It likes gridlock, and that’s what it sees.

They are betting on a Republican Senate keeping Biden in the middle of the road.

That's how I see the next four years.

This is it. The stock market likes gridlock between the president and congress. One party controlling the White House and another controlling the Senate ensures that no new tax increases or crazy regulations will get passed.

Holding the Senate is critical. If the Dems got the Presidency, Senate, and House the stock market would be in free fall right now.

Greginten: The United States Senate is still in "conservative" hands!
No big tax increases - no communist judges - no bizarre and restrictive laws to hamper capitalism.
Imagine where it would be if President Donald J. Trump would have a clear cut win!
If the demonrats would have gained control of the United States Senate you would have seen a 4,000 or 5,000 drop in the DOW.
COME ON TRUMP
Hold into the wind
VarmintGuy

Stability is a function of twist rate, no?

I am getting really tired of all the idiots resting easy in the assumption that a republican majority Senate will shield us from Kamala and crew and their stupidity. How many times have those gutless bastards rolled over and rubber stamped a POS appointment by a Clinton or Obama? How. many times have they let the jackass in the WH get us into some treaty or alliance that hurts us? Thinking a few more republicans than communists in the Senate is going to save us is utterly retarded if you remember anything at all about how they usually operate.

Nobody said that would actually happen. We're saying that's what the stock market is looking at and why it hasn't crashed.

What actually happens might be much different.

Ummmm, Trump just printed 6 trillion. That's stability, at least for a while.

They see one of two outcomes. Trump pulls it out or Biden wins but they have a weaker House, a Republican Senate and now a more conservative SCOTUS. So what that means to Wall Street is no huge tax hike will pass, no idiotic green new deal or any other Marxist crap. A blue sweep would have crushed the market. What you're seeing is pressure release from that not happening.

Correct about gridlock.

However, on the other side, what is going to happen with the next round of Covid stimulus? Will the Senate fork over as much money to President Biteme as they would have to Trump?

My financial advisor had a couple interesting graphs reflecting past S&P performance vs political outcomes. As you can see, the worst performance come when the Dems control both the house and senate, best when it's mixed regardless who's president. It does favor the incumbent party winning the presidency.

Predictable steady growth is good because valuation models work. So you can estimate what the company may be worth via discounted cash flow, present value, discount rate, treasury yields and such.

Lots of uncertainty right now means that there is lots of speculation.
But since the fact that th a the "Blue Wave" was propaganda has been established, the specter of new green deal taxes has been banished, which is good.

So things are going up.

Looking to make any sense of the stock market is like trying to understand women.

Thanks guys!

This week was recovery from panic election selling the week prior and acknowledgment that the government and economy are sound and that, regardless of the outcome of the election, Americans will continue to work, invest and build businesses. Could be some volatility until inauguration day (or until either side exhausts their appeals) but in general, the market will go on (and generally go up) without another Covid-mania or some big disruptor.

Well, pot stocks are up about 30% on average. That makes sense on many levels. Its a LOT closer to getting legalized in the U.S., and I could use a bong hit myself after this week......and I'm a "tee-totaling bible thumper".