With fall came political campaigning with the culmination of our national election on November 3rd. Many pollsters predicted a “Blue Wave,” predicting that the Democratic party would win the presidency, the senate, and the house. We still don’t have complete clarity on how the full election will be recorded.
Despite dozens of attempts to overturn election results by the Trump administration, Joe Biden will be the 46th President of the United States. While the pollsters predicted the Democrats would take 10-20 additional seats in the House of Representatives, they lost eight seats. And odds are that the Republican Party will win at least one of Georgia’s two U.S. Senate seats that are both going to a runoff on January 5, 2021. Both seats are held by Republican incumbents, and both are predicted to hold their seats. If this comes to fruition, Congress will be split, which the markets have looked at favorably.
As we’ve written, the markets historically have performed better when power is divided, with the best market performance when there is a Democrat as President and a split congress. This is exactly what we will have if the Republicans can hold on to at least one of the two seats up for grabs. It wasn’t surprising to see the markets rise on this news.