A blue wave in the midterms could tank markets |
A blue wave in the midterms could tank markets
Why aren’t markets crashing?
With the liberal press joyfully predicting that Democrats will take over the House and possibly the Senate in the November midterms, why aren’t investors pricing in a likely U-turn on some of President Trump’s pro-business agenda? Or worse — a slowdown in the AI juggernaut that continues to drive equity markets higher?
After all, Sen. Bernie Sanders (I-Vt.) and many of his leftist colleagues want to stop the rollout of new AI models and the building of data centers altigether at least, for now.. If they take charge of Congress, won’t the “super intelligence” companies, as Trump calls them, be in trouble?
Stuart Kaiser, head of U.S. equity trading at Citi, recently told a Fox Business audience that options markets show Election Day to be the biggest event moving the stock market currently — bigger even than interest rates.
But on the day Kaiser spoke, markets were bursting through all-time record highs, even as headlines, backed up by polling, were predicting a blue wave on Election Day. Betting site Polymarket puts the odds of Republicans losing the House at 90 percent, and Democrats gaining control of the Senate at 60 percent. Just weeks ago, that site had Republicans keeping the upper chamber.
Dan Clifton, head of policy research at Baird Strategas, cautions that “Republican Senate campaigns … are in a near panic mode.” He points to similar circumstances in 2006: “a second-term Republican president with an unpopular Middle East war and high gasoline prices thought the party could maintain the Senate,” but “one month later Democrats won 30 House seats, 6 Senate seats, and 6 gubernatorial races.”
Are investors indifferent to which........