Just mere hours before the election results from each separate state start pouring in, the stock market is at an impasse. Yesterday, tech stocks were able to recuperate slightly following a massive plunge last week, which is a sign of resistance from the market bulls. Nevertheless, the continuation of the bullish rally is still very much in question.
Depending on who wins tonight, the Nasdaq is likely to react in slightly different ways. If its Biden, the index could continue fluctuating in a narrow range, possibly extending the bearish correction in the near future. That is so because of his tax plans for the wealthy, and the general perception of how such bigger taxes could impede the stock market's performance.
Such downbeat reactions to a Biden presidency are highly unlikely to persist for too long, as he has been leading steadily in the polls since April. This means that the market has had enough time to price the longer-term implications of a democratic administration at the White House. Moreover, the accommodative monetary policy stance of the FED coupled with the robust economic performance that has been observed recently – manufacturing and durable goods orders - should continue to support the stock rally.
|Short Term||Long Term||Net % Gains|
|791 BPS||0||258 BPS||0||
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