The final presidential debate came and went and stock futures barely noticed. But that isn’t a surprise. As ridiculous as the first debate was, it didn’t move the market in a meaningful way and this slightly less crazy version was even less likely to matter.
The debates are done. As many as 1/3 of voters have already cast in their ballots and if you believe the polls, only 4% of the electorate remain undecided. (If a person hasn’t made up their mind by now, clearly they are not paying attention!) This election is going to turn out how it is going to turn out and tonight’s debate didn’t change anything.
At this point, Trump needs the polls to be way off if he’s going to win reelection. He pulled off the upset before and he can do it again. I just think it is less likely this time because pollsters recalibrated their formulas after 2016’s miss and are most likely are doing a better job counting Trump supporters, both the outspoken and the shy.
While the stock market loves Republicans’ tax cuts and reduced regulations, chances are good that if elected, Democrats will unleash a stimulus bonanza like we’ve never seen before. Whether all that debt that is good for the economy long-term can (and should) be debated, the stock market will love all the free money and will likely rally over the near-term.
If Trump wins, stocks go up. If Biden wins, stocks go up too. Sounds plausible.
So what’s really going to happen? Stocks will most likely tumble Wednesday morning as supporters of the losing side dump stocks in a giant wave of sour-grapes selling. Whether that lasts a few hours, days or weeks has yet to be decided, but no matter what happens, expect stocks to bounce back and any near-term weakness after the election will be another buying opportunity.
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