By Don Schreiber, Jr. – WBI Founder and CEO
It’s getting gnarly out there. The bear has been reaching out of its cave and slashing stock prices, but will it come out of hibernation? With less than a week to go on midterm elections, we ponder the market effects of the election results. Putting politics aside, here’s our take on what could happen in each possible outcome:
If the Republicans hold the House and the Senate, that might be enough to actually lift market sentiment as the current pro-growth policies would continue.
If we get a Democratic changing of the guard in the House, and the Republicans hold on to the Senate, we could meander higher through the end of the year. It really depends on whether or not revenue trends perk up. Companies would have to stop guiding lower for revenue trends, and they would have to say next year will be awesome. That’s what we need if we have a neutral outcome on the election.
If the Democrats take the cake on both sides, we think that could be enough to put us into bear market territory. We already have negative market sentiment, and that would push on it some. The president’s pro-growth policies at that point would definitely be called into jeopardy going forward.
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