With election day on final count down, we wanted to give you our thoughts on possible market reactions given certain outcomes. No matter what poll you may choose to look at, it is not clear of outcome at this time, which makes for a good analysis of market reactions.
So here we go:
- Possible continued semi-gridlock provides a yawn for markets: Our belief is that continued opposite party representations of the house/senate provide a neutral backdrop for either party that is elected as president. We give this a very high probability.
- Full sweep in either direction will create opportunities and perceived losers: Should either party have complete control, established by a presidential, house, and senate representation, market participants will take note and generally provide a positive for markets. Our probability is less than 25% on this option.
- Hanging chad or similar is very negative: While punches are no longer used for voting, a delay of any type will be a negative to market participants. Our reasoning is that this outcome creates continued confusion for the fiscal cliff. We give this a smaller than 5% chance probability.
One last item worth mentioning, the fiscal cliff (tax increases looming near year-end) are much more worrisome than the outcome of the elections for us. Should we have option two above occur (party agnostic) this is very positive for the fiscal cliff concerns and makes us more optimistic for the nearer term.
PLEASE VOTE..IT IS YOUR RIGHT!
Have a great day!
PS Phones are up and working perfectly!214-706-4300 www.jkfinancialinc.com 8222 Douglas Ave # 590 Dallas, TX 75225