Wall Street Knows Who Will Win Congress, so Why Shouldn’t You
Do you really think we will know who wins based on early voting tallies? The voting drop boxes don’t hold the secrets to the victor on November 8. . . #WallStreet does.
The games begin on November 1.
That’s the day #markets will have a fair fix on what will really happen. The smart money has the best #businessintelligence and will know who is ahead before any of us. They will place their trillion-dollar bets on what their information tells them the next Congress will look like.
Do we need to analyze the #economy? Nah. How about gauging the state of American #business?
If the runup to elections sees stocks rising, then look for the Republicans to retake the House and possibly the Senate as well.
There are two reasons for this:
1. The policies of Democrat Joe Biden, which caused the markets to plummet and inflation to soar, will be stopped dead in its tracks.
2. Equity markets always respond kindly to one party in the White House and the other in Congress.
Markets discount what lies ahead, so a rise points to a Republican victory.
If the markets open up in November sluggishly, the bigwigs are projecting a Democrat victory. A democratic congress means two more years of the same economic policy and more inflation, crime, and resources diverted to the millions of new arrivals from the southern border.
It means the financial and economic trajectory for 2022 will continue throughout 2023 and 2024. Markets discount the future, rising and falling on expectations.
Forget About Politics for a Minute
I can hear the activists seething. They grate their teeth, ready to call me every name in the book.
Despite what people believe, they usually do the exact opposite with their money.
When I was young, my friends all wanted Bill Clinton to win. When he did, they all asked for their year-end bonus in December rather than the usual January of the following year.
They may have loved Bill Clinton, but they loved paying George Bush’s taxes a lot more. They wanted to get their money while they could still pay his tax rates.
Money speaks its own language. While Silicon Valley and Wall Street are Joe Bidens greatest political cheerleaders, when it comes to their financial interests, they aren’t as enthusiastic.
The October Surprise
The one thing markets hate is surprises. If stocks rise for the first week of November, only to see the Democrats keep the house, look for a massive drop.
If stocks fall, anticipating Biden keeping all branches of government, and the Republicans win, look for a spike.
To be honest, even if markets rise and the Republicans win, look for a sell-off on the news come November 9. If the markets tank and the Democrats win, look for a small bounce as traders cover short positions.
If you want to have some fun on election day — before the results are in — sell some out-of-the-money call options on ETFs or equities to go in the opposite direction the stock market has been moving for the past week.
Nothing big, mind you, just a little election fun.
After all, no matter who wins or loses, Nancy Pelosi and Mitt Romney will still get paid.
Why shouldn’t you?
David Ben Horin has a gift for making #money by #investing in the #stockmarket. His Set for Life trading fund is up 29% for 2022 compared to Berkshire Hathaway (-6%), the S&P 500 (-22%), and the Nasdaq 100 High #Technology index (-33%). For a $99 annual membership, you can monitor his portfolio and receive instant notifications of his trades and investments.