Monday, October 10, 2016

Stocks too Complacent about Politics

The stock market has become way too complacent about the November election in assuming that Hillary Clinton will be elected and that the Republicans would end up controlling the House of Representatives. Today's WSJ/NBC snap poll has Hillary ahead by 11 points. If that holds through November the House will likely go Democratic and with that the market is nowhere near prepared for a wave tax and regulatory policies that a Clinton presidency will bring with it.

That is why House Speaker Paul Ryan "broke the glass" today in declaring that he would no longer defend Trump. He told his caucus members that they were on their own. A week ago I thought the Republicans had an even chance of holding the Senate and would only face modest losses in the House. Today the Senate is gone and the House is at risk. Gerrymandering or not, if Republicans don't show up to vote, the ball game is over. Consider yourself warned.

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