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Wall Street is ready to bid farewell to the threat of a so-called "blue tsunami" on election day.
The Dow Jones Industrial Average index reached 76 points at 9:42 pm. AND, as the prospect of winning Democrats in the Senate and House of Representatives faded with both hot and heavy results. Instead, early signs indicate that Republicans retain their majority in the Senate, while Democrats gain control of the House as many street protesters expected.
Yahoo Finance contacted several Wall Street professionals late Tuesday to find out what a divided government would mean for investors.
"Positive" – Keith Lerner
- Cred Street: Predictor of the veteran market with over 20 years of experience.
- Current role: Chief Market Strategist at Suntrust.
"The markets take it [what could be a divided government] positive, "says Lerner. "Some were concerned about [Democrats taking both chambers of Congress]it would probably have been negative for the market. Lerner believes investors will move quickly beyond the mid-term elections and focus on a healthy US economy and US companies.
He also thinks that financial stocks and small cap stocks could be the subject of an offer this week. Both sectors tend to exit well when they are not crushed by regulation, which often accompanies a democratic control of the government. Defense actions could also take the likelihood that their defense spending will remain high.
No blue tsunami can also mean no democratic pressure to raise minimum wages, which would be good for retailers, said Lerner.
"Uncertainty increases" – Sam Stovall
- Cred Street: A magician who collects market data, Stovall has approximately 30 years of experience in the financial markets.
- Current role: Chief Investment Strategist CFRA Research
Stovall is a little more bearish about the meaning of a divided government for investors.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = ""Uncertainty is increasing and there is a probability that things will not happen," says Stovall. "It removes the second part of Trump's tax reform and elevates the discord between the two parties." "data-reactid =" 30 ">"Uncertainty is increasing and there is a probability that things will not happen," says Stovall. "It removes the second part of Trump's tax reform and elevates the discord between the two parties."
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Mr Stovall said that the automotive and energy sectors may be under pressure when Democrats speak out against the threat of increased regulation. "data-reactid =" 31 ">Mr Stovall said that the automotive and energy sectors may be under pressure when Democrats speak out against the threat of increased regulation.
Stovall does not see a bear market to occur because a recession is unlikely. He notes that, according to historical data, every president since Teddy Roosevelt has experienced a recession during his first term.
"More Investigations" – Scott Clemons
- Cred Street: More than 28 years of experience in the financial markets.
- Current role: Chief Investment Strategist Brown Brothers Harriman.
Clemons says he has not changed clients' portfolios – which tend to be long-term – before the elections. He also does not plan to make changes as a result.
<p class = "canvas-atom web-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "" We could attend a small gathering on Wednesday, "Clemons said. "The bThe biggest contribution of this administration to Corporate America has been deregulation, which falls under the jurisdiction of the President – a divided Congress does not threaten this economic wind. ""data-reactid =" 46 ">" We could attend a small gathering on Wednesday, "says Clemons.The biggest contribution of this administration to Corporate America has been deregulation, which falls under the jurisdiction of the President – a divided Congress does not threaten this economic wind. "
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Clemons warns that a divided Congress could mean more investigations on the president. This is not without risk for the actions. "data-reactid =" 47 ">Clemons warns that a divided Congress could mean more investigations on the president. This is not without risk for the actions.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = ""I predict two years after reminding clients to distinguish between things that threaten to undermine trust and those that could hurt value," says Clemons."data-reactid =" 48 ">"I predict two years after reminding clients to distinguish between things that threaten to undermine trust and those that could hurt value," says Clemons.
"More controversial" – Jonathan Golub
- Cred Street: More than 30 years of experience in the financial markets.
- Current role: Chief Swiss, equity strategist, Credit Suisse.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = ""It may change the tone in Washington and make it more controversial as Democrats gain control of key committees," Golub said. He thinks that even if the Democrats will intensify their investigations on Trump, they will prove to be fruitless. "data-reactid =" 53 ">"It may change the tone in Washington and make it more controversial as Democrats gain control of key committees," Golub said. He thinks that even if the Democrats will intensify their investigations on Trump, they will prove to be fruitless.
Similar to Lerner, Golub believes he will now need to focus once again on the strong US economy and the 2020 presidential race.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = ""Unless there's a surprise in the Mueller investigation or a recession, which is reasonably unlikely, Trump seems stronger for re-electon.""data-reactid =" 55 ">"Unless there's a surprise in the Mueller investigation or a recession, which is reasonably unlikely, Trump seems stronger for re-electon."
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