PUTNAM POSTING: Election 2020: Finding Balance and Acceptance
Jennifer Maher | November 10, 2020
Marred by doubt, disruption, and obstruction, the Presidential election has been like a death by a thousand cuts. Most of us are in a state of confusion, disbelief, and fear. Yet, this morning, after reading through a ton of articles by economic experts, I felt hopeful about a financial recovery for the first time in nearly eight months. Here is why.
Last week, while the market adjusted its sails in anticipation of a “Blue Wave,” the projected Democratic sweep amounted to more of a conspicuous polling discrepancy than a domination. Nevertheless, the Dow continues to rise—a strong indication that investors are confident in the economy and its recovery, regardless of who is elected. This got me thinking and digging deeper.
While Wall Street typically favors a Republican-led White House, stock prices were moving up when polls indicated that Democrats would hold sway in both the Executive and Legislative Branch. Perhaps it was the hope of a beefy relief package that the market was clamoring for and banking on. Even Republican Senate Majority Leader Mitch McConnell has voiced strong support for the passing of another stimulus bill before the end of the year. According to the Financial Times, if you look back through our history, the best period for U.S. stocks has been under a Democratic administration and a split Congress.
From an economic viewpoint, if we follow Wall Street’s instincts and view all potential outcomes of this election as a balance, rather than cause for increased divisiveness, we can heal and prosper. Many people are fearful of the economy under a Biden presidency. Yet, it seems even with the potential of a new Democratic administration, the Republican-led Senate will likely halt any corporate tax increases, a key point of apprehension from Wall Street. With the Federal Reserve continuing to make money, and minimal risk of tax increases and regulatory interference, combined with a Federal Stimulus Package, a rosier economic outlook may begin to bloom.
This is an unpredictable and unsettling time for the country and our county. We, as a community, must challenge ourselves to find common ground and start to make our way out of this mess. The future depends on it.