November 9, 2022
Good morning,
Historically, stocks have risen at a faster pace when Democratic presidents have had a check on their power from Congress (BCA Research). While the final election results have not been decided, the GOP appears to have narrowly gained control of the House. It’s too early to say for the Senate. The House results alone create a check on the power of the President. Should investors be excited about gridlock? That might be a stretch, but history points to modestly better stock market performance with it. Markets do not like uncertainty, and political uncertainty is no exception. There is less uncertainty this morning than there was yesterday, even without of the final election results.
Futures are off slightly this morning (-.25%) pre-market opening. Now the market’s focus turns to tomorrow’s CPI (Consumer Price Index). It is looking for even the slightest hint that the Fed’s aggressive rate hikes so far this year are biting into inflation. It is the final and biggest hurdle for our rally over the past 10 days. See you Friday.
Be well,
Mike