Market Call: Sweep Stakes

We still think that gridlock would be the most bullish outcome of the November 5 presidential and congressional elections, making it difficult for the next president to deliver on all the promises he or she made during their campaigns to win the White House. More than half of our Founding Fathers were lawyers. They designed a system of checks and balances that required lawyers to get anything done and even made it hard for them to do so without clear support of the three branches of government!

A sweep by either the Democrats or Republicans might confuse the equity market. Initially, a Harris sweep might be more bearish than a Trump sweep because the former promised to raise the corporate tax rate and the capital gains tax rate, and even tax unrealized capital gains. Kamala Harris also supports maintaining and strategically using tariffs, but not blanket tariffs that could rise prices for American consumers.