With control of the Senate hanging in the balance I don’t think the market is paying attention much less expecting a Democrat sweep. If the Democrats control all three branches, the preferences shift somewhat dramatically and the potential for sweeping legislation affecting markets will loom. Check out my simple guide I wrote about here: https://www.retirement-professionals.com/blog/2021-potential-policy-and-legislation-affecting-markets. These policy preferences could affect markets particularly the dollar, inflation, and interest rates.
However, with a 50/50 Senate it would still be difficult for Democrats to move legislation, especially their most aggressive and far reaching proposals. Even just one moderate hold out Democrat could block or otherwise moderate legislation. And there is a bipartisan “problem solvers” caucus comprised of ~9 moderate Senators that were instrumental in shaping and passing the most stimulus/Covid19 relief bill that Trump signed. Should the sweep occur we will want to keep an eye on that caucus as well as the dollar and interest rates.
Therefore, while we could see some volatility, I don’t believe a sweep alters the current landscape enough to justify a massive decline or concern in the markets.
The views and opinions expressed herein are those of the author(s) noted and may or may not represent the views of Capital Analysts or Lincoln Investment. The material presented is provided for informational purposes only. No person or system can predict the market.