Analysts warn that history suggests that a sweep of the\nDemocrats or Republicans next November could mean bad news for stocks.<\/p>\n\n\n\n
Investors are worried about how the stock market will react\nto next year’s federal elections. Instead, attention should be paid to\nexpectations that Democrats are on track to control the Senate, where\nRepublicans currently represent a majority, or that Republicans are on track to\nregain it.<\/p>\n\n\n\n
“Fear of such a unified government outcome on Election\nDay 2020 is substantial at the same time that confidence, so very important to\nmarkets and economies, remains fragile albeit stabilizing,\u201d, said analysts.\nThey also pointed out that survey data and other indicators show that\nexecutives remain cautious about the future and are reluctant to plan,\nespecially with regard to capital spending, especially as the trade war has\nreally affected business.<\/p>\n\n\n\n
Analysts at Goldman Sachs, meanwhile, warned in a note\nreleased on Monday that political constants do not necessarily hold in\ninvesting.<\/p>\n\n\n\n
” In the United States, equity returns during periods\nof divided federal government have typically exceeded returns achieved when one\npolitical party controls the White House, Senate, and House of Representatives\u201d,\nGoldman Sachs analysts said. ” Since 1928, excluding recessions, when the\nfederal government was controlled by a single party, the S&P 500 median\n12-month return equaled 9%. However, the median return under a divided government\nwas 12%.”<\/p>\n\n\n\n
Goldman Sachs said it expects the bull market in US stocks\nto continue in 2020, with a persistent profit cycle and continued economic\ngrowth to raise the benchmark for the Standard 500 by 5% to 3,250 points as\nearly as 2020. They said the rise was “political and policy uncertainty”.\nThis will maintain the record set for most of 2020.<\/p>\n\n\n\n
After analysts pointed out that many Democratic candidates\ncalled for a reversal of the 2017 tax cuts, Goldman analysts said the federal\ngovernment could push investors to reverse the tax cuts and lower projections\nfor 2021 in Standard 500 earnings per share to $162, a Decrease of 7%, doubling\nthe profit rate to 16%.<\/p>\n\n\n\n
Tim Moe, Goldman\u2019s chief equity analyst of Asia Pacific\nwarned in an interview with Bloomberg that the likelihood of a return to\ncorporate tax retreat for 2017 by the United Democratic Government could become\na spark that could reach a 20% correction.<\/p>\n\n\n\n
Julian Emmanuel, head of shares at BTIG, has revealed the\nfear of a sweep by either party on the Standard 500, which shows instruments\nthat give the owner the right but not an obligation to sell the index at a\nspecified price before a certain date. This gives the holder the right but not\nthe obligation to purchase at a specific price before a certain date.<\/p>\n\n\n\n
While investors may be nervous, stocks climb to the\nso-called anxiety wall. The S&P 500, the Dow Jones Industrial Average and\nthe Nasdaq Composite Index hit a record high on Monday. The S&P 500 has\nreached 25 per cent so far this year, with recent support tied to the upbeat\noutlook for the so-called first-stage trade agreement between the United States\nand China.<\/p>\n","protected":false},"excerpt":{"rendered":"
Analysts warn that history suggests that a sweep of the Democrats or Republicans next November could mean bad news for stocks. Investors are worried about how the stock market will react to next year’s federal […]<\/a><\/p>\n<\/div>","protected":false},"author":1,"featured_media":1484,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[3,4],"tags":[74,66,79,50,77,36,34,145,114,127,120,10,58,57,70,47,86,31,18,80,23,46,109,39,81,85,106,115],"_links":{"self":[{"href":"https:\/\/skyeconomynews.com\/wp-json\/wp\/v2\/posts\/1483"}],"collection":[{"href":"https:\/\/skyeconomynews.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/skyeconomynews.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/skyeconomynews.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/skyeconomynews.com\/wp-json\/wp\/v2\/comments?post=1483"}],"version-history":[{"count":1,"href":"https:\/\/skyeconomynews.com\/wp-json\/wp\/v2\/posts\/1483\/revisions"}],"predecessor-version":[{"id":1485,"href":"https:\/\/skyeconomynews.com\/wp-json\/wp\/v2\/posts\/1483\/revisions\/1485"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/skyeconomynews.com\/wp-json\/wp\/v2\/media\/1484"}],"wp:attachment":[{"href":"https:\/\/skyeconomynews.com\/wp-json\/wp\/v2\/media?parent=1483"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/skyeconomynews.com\/wp-json\/wp\/v2\/categories?post=1483"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/skyeconomynews.com\/wp-json\/wp\/v2\/tags?post=1483"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}