Wall Street set to rise as investors take split Congress in stride

“U.S. stocks were on course to open higher on Wednesday after the midterm elections handed Democrats the House of Representatives and saw Republicans reinforce their control of the Senate in a widely expected outcome,” Reuters reports. “Futures for the three major Wall Street indexes powered higher along with global stocks, while the dollar fell on fading hopes of further fiscal stimulus.”

“A Democrat-controlled House will hamper President Donald Trump’s pro-business agenda, but few worry about a reversal in already-enforced corporate tax cuts and deregulation measures that have played a large hand in the U.S. market’s rally since the 2016 election,” Reuters reports. “The results for the Republicans were no worse than feared and pointed to a political gridlock that was largely expected by investors, leaving them free to buy back into a market that had its worst month in seven years in October.”

“At 8:36 a.m. ET, Dow e-minis were up 165 points, or 0.64 percent. S&P 500 e-minis were up 20.75 points, or 0.75 percent and Nasdaq 100 e-minis were up 70 points, or 1 percent,” Reuters reports. “In a sign of appetite for risk, shares of high-growth technology and internet stocks, including Apple Inc and Amazon.com Inc, rose more than 1 percent in premarket trading.”

Read more in the full article here.

“Along with gaining clarity on the midterm’s outcome, investors were bullish because they believe the Washington gridlock scenario will be best for the market,” Fred Imbert reports for CNBC. “History has also pointed to strong returns for equity markets when Congress is divided.”

“The Dow was up 3.7 percent for the year through Tuesday after an October sell-off leading up the election cut into its returns. Relief that Republicans held onto the Senate also helped boost stocks as some investors feared a so-called blue wave clamping down on Trump’s agenda,” Imbert reports. “Futures fell initially overnight as Democrats took their first seat back in the House and fears of a possible ‘blue wave’ increased… But then stock futures rebounded as more results started to come in.”

“Overall, stocks typically do well when Congress is split and the White House is under Republican control,” Imbert reports. “In those instances, the S&P 500 averages an annual return of 12 percent, according to Bank of America Merrill Lynch. ‘The best case scenario from here, in our view, might be gridlock: do nothing, and undo nothing,’ wrote Bank of America Merrill Lynch analysts and economists in a report leading up to the election.”

“This is the best buying opportunity for investors before year-end, said Phil Blancato, CEO of Ladenburg Thalmann Asset Management,” Imbert reports. “‘This is your entry point,’ he said, adding that positive seasonal factors, including strong holiday sales, should boost markets higher before the end of 2018.”

Read more in the full article here.

MacDailyNews Take: Historically, Wall Street loves Washington gridlock because it minimizes uncertainty.

33 Comments

    1. You are delusional.

      The bulk of the Senate seats up for grabs last night were in red or red leaning states The 2020 cycle will not be so favorable for Republicans.

      Next, Democrats gained at the state level broadly. Expect more in 2020 when redistricting is on the table.

      Next, tell Trumov good luck getting another corporate tax cut or building his stupid wall. All tax and spending bills originate in the House and Speaker Pelosi is not going to build Trump’s wall. Going to be interesting when his wall is not built should he run for re-election after promising it and having had a Republican Congress his first two years.

      Finally, it’s Mueller time. And it is not political as Mueller is a Vietnam Veteran Marine who completed Army Ranger training and survived a tour of duty on the DMZ- one of the nastiest places anyone could have served in that war. He is also a former FBI Director and US Attorney. He is also a lifelong Republican.

      1. Biggest Midterm House Losses Since WWII: Obama (-63), Truman (-55), Clinton (-54). ALL three Democrats won re-election.

        If I remember correctly on the news ALL Senators up for re-election that voted against Kavanaugh, LOST. Justice is served.

        Particularly considering that 92% of the media is against the president since day one could not produce a “blue wave.”

        Mueller is a RINO like McCain, no wonder you support him.

        Call it like it is DG, enough with the wishful partisan thinking…

            1. Okay TowerTone, i’ll call your bluff.

              Goeb: “Mueller is a RINO like McCain, no wonder you support him.”
              mossman: “Ronald Reagan would be a RINO by your ridiculous alt-right measure.”

              TowerTone: “People on the left …”

              FACT: McCain was more of a principled representative of his constituents than a stooge for the republican party, but he was elected his entire life under what party? Republican. the “in name only” assertion is both unfounded and ignorant. Yet you choose to side with Goeb’s senseless partisan bullshit.

              FACT: Reagan was a democrat and held socially progressive views all his life. While today held up as a demigod among wistful republicans who loved his approachable likeable character, the fact is his anticommunist rhetoric when campaigning for Nixon was controversial enough to get him canned from GE Theater..

              When Reagan did run for president, he ran at a time when OPEC and inflation had gotten Americans so fed up that they would have elected anyone new, even a partially senile washed up actor. The ensuing Reagan years were neither peaceful nor economically great for America as massive corruption and wasteful taxpayer spending occurred under his nose. Reagan blew up the federal budget on dead end projects and foreign adventures in pursuit of his lifelong obsession with communism. Socially, however, the 1980’s were as liberal and freewheeling as the late 1960’s a generation earlier.

              Reagan, a spendaholic and democrat in all matters except anticommunism, was a real RINO. Goeb and you of course want to argue that — and instead of presenting facts of your own, you accuse “people on the left” of not knowing the facts.

              FACT: I am not on the left, nor partisan. You and Goeb however are obviously more interested in divisive politics than reality.

              Mark my words, Trump will do nothing but whine and tweet for two more years about how evil everyone is. That’s all he’s done thus far. Why you feel any urge to cheer for him is beyond me. Great conservatives are people like Eisenhower — principled leaders who use facts to guide wise long term policy, even if painful. He paid for WW2 by imposing a highly progressive tax that hurt the rich. But many the rich had gotten that way by profiteering from the war, so in the end the booming 1950’s and 60’s couldn’t have happened without federal debt under control and more money in the hands of the GIs who came back home to build new businesses. Post presidency, Eisenhower was happy to be a consultant for leaders of any political persuasion. He was arguable the most effective executive of his era. In dramatic compromise, Trump has alienated well over half of Americans, his photo op corporate business roundtable fizzled instantly, and nobody from any party trusts anything he says. His own staff are caught up in changing tunes on a regular basis. This is not a leader. Trump is an idiot that will sell the farm in order to see his name in lights for one night.

            2. Sorry for the typos. More stupid autocorrect, my sloppy editing, and inability to fix after posting. Oh well. You get what I’m saying. Trump isn’t fit to unfasten the boots of a real conservative.

        1. Re GoeB:
          I am not a Democrat. Did not vote for Obama or Hillary Kerry for that matter. The first campaign I worked on was the Reagan campaign in 1980. So much for partisan thinking.

          Kavanaugh should not have been seated and his process was jammed through as was Gorsuch after the stonewalling process of Judge Garland, who was a Republican despite being nominated by Obama.

          I do not know where you get the 92% of the media is against Trump. Please show the list of media included and the method used to determine how they are against him. most commercial media in the US is neither Conservative or Liberal- it is corporate. Corporate is a hybrid of business friendly economics, hawkish national security and liberal social policy with a healthy does of Neo-Liberal economics thrown in.

          Mueller is what used to pass for a mainstream Republican. I grew up in the midwest where every elected official at the local level was a Republican, and they were nothing like the people running the party these days. Gerald Ford was my Congressman back in the day and he was a good and decent man.

          By the standards of the current crop running the GOP, Eisenhower, Reagan, George HW Bush, Theodore Roosevelt, and Lincoln would not be welcome. To be honest, neither would Herbert Hoover.

          This vilification of Democrats by today’s Republicans is not good for our country. Harry Truman became friends with Hoover shortly after taking office when the former President offered his services to the new one. He went to war ravaged Europe and made a survey and reported back to Truman on war relief to prevent broad hunger and civil unrest. Later Truman appointed him to a commission to survey and reorganize the Executive Branch to improve efficiency and bloat.

          Hoover and Truman became friends for the rest of their lives despite being at opposite ends of the political spectrum. Truman invoked Hoover’s name on the 1948 campaign trail for his policies- never questioning his patriotism or desire to see our country better itself. That is missing from today’s political warfare- it is personal, nasty and often not factual.

          I am an independent voter- the kind that decides elections. In today’s political climate I am enamors of neither party, but could not see myself voting for any Republican I know of that is running for office. That is because of policy- not party.

          1. They say that all politics is local, so let me tell you about the political trends I can see locally.

            I live in what has traditionally been considered the most conservative and specifically the strongest law-and-order county in Texas. The Democrats have lost every election here since the 1980s.

            •Yesterday, the county gave Beto O’Rourke a majority over Ted Cruz.

            •Our 8-term Congressman, part of the House Republican leadership, lost his home county (although he squeaked through on votes elsewhere in the district). Two other Texas congressional districts flipped and a third (with Trump-independent Will Hurd as incumbent) looks to be just holding.

            •Both of the county’s incumbent members of the Texas House were defeated by Democrats. Ten House seats elsewhere in the state also flipped.

            •Two of the law-and-order judges who gave us our reputation, one in office for 12 years and the other for 36, were defeated by Democrats.

            •One of the Republican County Commissioner candidates won by less than 200 votes out of 40,000 cast.

            Why? Demographics, pure and simple. Our population is younger, better educated, and more diverse than it ever was before, and that is reflected at the ballot box. If the Republican Party wants to win the county back, it will have to appeal to those voters and not to the disappearing population of older white male voters without a college education.

            President Trump’s supporters did reasonably well yesterday, but it may have been the last hurrah of the dinosaurs. The appeal of dog-whistle politics is fading… not enough yet to create a disaster for the party, but enough to reinforce the lessons Republicans should have learned in 2008-16.

          2. “I am not a Democrat. Did not vote for Obama or Hillary Kerry for that matter. The first campaign I worked on was the Reagan campaign in 1980.”

            Right, you are a left leaning independent, certainly not a conservative, that cannot find one Republican to vote for, come on. You never declared your partisan philosophy so I have to guess. Got it dozens of times. BTW, I’m a lifelong registered INDEPENDENT that never worked on a campaign. So what does that make me?

            “Kavanaugh should not have been seated” Tell that to all the Democrat senators Trump campaigned against and lost. The whole show was rigged and he was framed and no evidence exists. When RINO Senator Collins gave an eloquent floor speech saying no proof exists after the 7th FBI investigation, it spoke volumes. What in the world are you thinking?

            “I do not know where you get the 92% of the media is against Trump.” The studies have been reported by several news outlets over past two years. Oh, that’s right, if it is not reported by CNN or NYT (coverup) it is not true.

            Mueller is a RINO, a typical moderate liberal with deceitful registration status, nothing more.

            “Gerald Ford was my Congressman back in the day and he was a good and decent man.” Agreed.

            “By the standards of the current crop running the GOP, Eisenhower, Reagan, George HW Bush, Theodore Roosevelt, and Lincoln would not be welcome. To be honest, neither would Herbert Hoover.”

            That’s really interesting that you continue to CRITIQUE ONLY decades of Republicans comparing them to the party present day. But conspicuously absent is not ONE WORD of comparing present day Democrats to JFK and others so I will help you out. JFK Democrats are closer to and many are now Republicans present day. Democrats today are batsh*t EXTREME liberals and socialists like Warren, Waters, Sanders, Booker and others.

            “This vilification of Democrats by today’s Republicans is not good for our country.” Your “vilification” of Republicans EXCLUSIVELY is not good for our country.

            “I am an independent voter” Me too, so?

            “could not see myself voting for any Republican I know of that is running for office. That is because of policy- not party.” Sorry, but I don’t believe you any more than the FAKE conservative Republican USER. The economy is roaring and set many records and President Tump triumphed according to the WP, so your partisan opinion is just that. President Trump has done a lot of good for our country. Yes, he does not get PC style points, only the media and celebrities care about such things, but results are more far more important and hopefully six more years…

        2. That’s because Republicans gerrymandered the crap out of this country in 2010. If the landscape were the same, the GOP’s losses would’ve been catastrophic.

    2. This shows how skewed our elections are. Over 12 million more Americans voted for Democrats for the Senate, yet the Republicans increased their margin. But Tester has won and Florida will be a recount.

  1. No Blue Wave; How President Trump won the election

    While Tuesday night was not a complete win for Republicans, there was no blue wave, either. By most measures, Republicans beat the odds of history and nearly everyone’s expectations, while Democrats were left disappointed as the fantasy of Beto O’Rourke, Andrew Gillum, Stacey Abrams and others winning fizzled. Not one new progressive Democrat was successful bursting onto the scene. It will take a few days to process the meaning of this year’s election returns, but the instant analysis is clear: Democrats may have won the House, but Trump won the election.

    If the 2018 midterms prove anything, it is that Trump is standing strong while Democrats and their allies who thought Trump would have been affirmatively rejected are in fact the ones who have themselves been denied.

    Democrats have underperformed in comparison with the historical markers and general expectations of a midterm cycle. No liberal will want to admit it, but Trump is an asset to the Republican Party, while President Barack Obama was a disaster for the Democratic Party.

    Let the message be clear: Voters had a chance to repudiate Trump and they did not. Much of the commentariat has said this year’s elections are about who we are as a country and what America is all about. Well, a lot of America seems to be about supporting Trump. The Democrats thought Trump’s negatives would be enough to propel them to victory. The 2018 results show it is clear they need a different plan if they think they can win in 2020.

    Trump and his allies have an appeal that the elites in New York and Hollywood cannot dismiss or combat. All of the 2018 Democratic heartthrobs lost. That must sap the enthusiasm of the resistance. For the most part, when voters had to decide, the angry left was rejected and Trump was rewarded.

    The Washington Post, Ed Rogers, November 7, 2018

    1. Look at the vote counts in those races- they are very close and demographics are steadily shifting year by year. Every day and every month the demographic groups that tend to vote Republican shrink and those that tend to vote Democratic increase.

      The Republicans lost the House and they likely will not see it again anytime soon. The House controls all spending and taxation and they can put restrictions into any budget item that limits how the money can be spent. When a new Congress is sworn in, Trumpov will be dealing with a very different reality.

      1. “it will take a few days to process the meaning of this year’s election returns, but the instant analysis is clear: Democrats may have won the House, but Trump won the election.”

        Yes, President Trump certainly triumphed.

        “If the 2018 midterms prove anything, it is that Trump is standing strong while Democrats and their allies who thought Trump would have been affirmatively rejected are in fact the ones who have themselves been denied.”

        Yes, indeed!

        “No liberal will want to admit it, but Trump is an asset to the Republican Party, while President Barack Obama was a disaster for the Democratic Party.”

        Exactly! It is about time the liberal media calls it correctly. Judging by the leftist comments here, the disappointment is understandable and obvious. Liberals NEVER admit defeat because you have to be a grown up.

        “The Democrats thought Trump’s negatives would be enough to propel them to victory. The 2018 results show it is clear they need a different plan if they think they can win in 2020.”

        Epic wrong. But I would like to see a positive message coming from Democrats in 2020 and won’t hold my breath. Ed Rendell was on Fox News last night and warned House Democrats to “legislate” and not “investigate.” We shall see.

        “Trump and his allies have an appeal that the elites in New York and Hollywood cannot dismiss or combat. All of the 2018 Democratic heartthrobs lost. That must sap the enthusiasm of the resistance. For the most part, when voters had to decide, the angry left was rejected and Trump was rewarded.”

        Amen! Nuff said…

        1. The Trump endorsement was a lead albatross around the neck of many Republican Congressional candidates. Look at all the Trump campaign stops and you’ll see a trail of LOSERS who lost their races.

          The Senate races were disproportionally taking place in Republican leaning states. 45 million Dems versus 33 million Repubs in the popular vote for Senate, yet Republicans still pick up seats? Didn’t we chuck the Tea in the Boston harbor over this? Not sure why economic centers of our great United States would have to kowtow to the impoverished Red states which have relatively nothing to offer.

          Well now Senate can stack the courts with Republican judges so Monstanto can continue to kill us all slowly with Glyphosate.

    2. Ed Rogers…PFFFFT
      You mean WAPO’s semi tame pit bull terrier columnist they tolerate because his arguments are so easily shot down (check out the comments to ‘any’ of his articles), he lends a pretense of impartiality and he gets site hits as a result. In other words he’s a joke.

  2. Agree with MDN’s take. 2 more years of kicking the can down the road. There will be no actual problem solving of any major issues… Hopefully we can have a gradual increase in interest rates and no major market crash. But at some point the deficits have to be dealt with.

    1. The can has not been kicked down the road. The GOP Tax Scam has left a debt bomb on America’s doorstep and they wereplannifg on using it as a cudgel to savage Social Security and Medicare come January.

      That stupid tax bill has the Treasury borrowing at record levels and as interest rates rise, payment on the debt will become the single largest line item in the Federal Budget. Most of the money that went to corporate America by that action was wasted on stock buybacks instead of being invested in the business or being passed on to shareholders with a special dividend.

      Cleaning up Trump’s budget mess is going to be a heavy lift and of course, he will blame it on the “Democrat” Party despite his party doing the tax cut and spending increases.

      1. DavGreg, the debt bomb existed way before Trump. As a person who pays a sh*tload of taxes, I don’t think taking less of peoples hard earned money is a tax scam. Our govt has a spending problem, not an under-taxing problem. I believe everyone should pay a fair share- including the very rich and the lower income folks should have a little skin in the game too. And yes, I believe all programs are going to need to tighten the belt.

  3. Nice to see Wall Street up and MDN’s take is spot on. When the sore losers and poor winners of Apple’s home nation are gridlocked into fighting amongst each other the free and civilized world can breathe a bit easier.

    Now if it were a real fight, there is a good chance that the unethical invading force from Iraq would be called back and that search for weapons off mass destruction program would be halted temporarily and this would certainly help bring peace to Iraq, or at least empower them to resolve their own issues.

    And that is where Apple comes in. Apple has a mandate to empower people, to let them think different, to provide the power to be your best. Apple, Steve Jobs vision is all about that, empowerment, a stark contrast to what their home nation has become. Just think how much better the entire world would be if the place was peaceful enough to allow Apple to open up Apple stores in places like Iraq.

  4. There is no uncertainty.

    There is only certainty. The Democrats have publicly stated that they have no intention on working to run the nation. Their goal has been and continues to be “Get Trump.” They will continue to convince their constituents that this amounts to governance. They plan on subpoenas more pointless investigations, and generally blocking everything.

    Well done leftists. America thanks you.

    1. Hey, that rings a bell.. “Senate Minority Leader Mitch McConnell summed up his plan to National Journal: “The single most important thing we want to achieve is for President Obama to be a one-term president.”

  5. So while the divide remains between the left and America, there is one thing to look forward to. I cannot help but smile when I think of our youngest new Congress WO-MAN. I wonder if they have elementary school general knowledge assistants for congress people who need a catch up? No really, she’s a sweetheart. And you just want to pinch her little cheek. I wonder if she curtseys after an interview?

    1. And I can’t help but smile over your gross example of entitlement that you think testosterone laden patronising put downs and threats of assault because…’women!’ You are the dinosaur that gives elected women all the justification they need to pursue a life in politics.
      Just what are you scared of snowflake?
      Hilarious and pathetic. Well done

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