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‘Harris-Gridlock’ As The Vol Killer
As much fun as a Trump-inspired surge in small business sentiment and a galloping, animal spirits-style rally in cyclicals might be, it's probably not wrong to suggest the calmest election outcome for markets (setting aside volatility in and around the actual vote, and praying for no violence) is Kamala Harris with split government.
Why? Well, simple: In a Trump loss scenario, aggrieved GOP lawmakers would exact their revenge by blocking anything and everything Democrats try to do on the fiscal
I for one would like to hear your take on a blue sweep “something that is not likely to happen”.
Blue sweep = stocks down, bear-steepener, hand-wringing, at least initially.
A blue sweep?
Best guess, Harris, narrow democratic house, gop senate 51/49
But Tester and brown have shots as sheehy and Moreno are not strong senate candidates. There could also be upsets in Nebraska, florida and Texas.
We may be surprised to find a very centrist executive and legislature when it is all tabulated.
And a centrist government even in a “blue” sweep…
Let’s take a look at Wednesday. That’ s the day Election 2028 officially kick’s off for all the “losers” in America. I once had a friend who ran a media operation (newspaper, TV and radio operation in the midwest. He said his company made all of its profit for each four years of its life in the first three months of the fourth year of each four-year election cycle. Now that’s what I call Black Friday.
Folks my age will remember the election of 1948, when the Chicago Daily Tribune proudly proclaimed “Dewey Defeats Truman.” I got to go out and pick that paper off my parents’ porch that morning. A brief educational moment followed.
Harkening back to the recent bipartisan immigration bill which was torpedoed by Trump at the last minute, isn’t there a chance that many GOP reps will be more amenable to compromise and “reaching across the aisle” if the Caudillo of Mara Lago is pushed aside? What will his leverage be then? Threatening to support more extreme candidates in GOP primaries I suppose. But his influence there seemed to be waning as far back as 2022.
On this, possibly the last day of the Republic, the 3Q earnings season stands as follows:
By name and 75% by cap of the S&P500 have reported 3Q, 60% and 69% beat consensus revenues, 77% and 87% beat cons EPS, 49% and 55% saw 4Q revenue cons go up, 34% and 40% saw cons EPS go up, and -0.3% and -0.1% saw stock price go up on reporting (read the negative numbers as 0.3% and 0.1% saw stock price go down on reporting). Feels like a flattish-to-slightly negative quarter for revisions.
At the index level, FY1 (2024) and FY2 (2025) estimates have been pretty flat for awhile, what keeps the N12M estimate going up is the forecasted improvement from 2024 to 2025, which my tracking doesn’t capture but really should.
I find it hard to care, truthfully, until we know if the 1,000 Day Reich is beginning in January.
My small business will be impacted negatively by Trump tariffs, as will my wife’s work in the fashion industry. Any small business owner in America who thinks Trump would be ‘better for business’ probably sells Trump branded merchandise, though most of that garbage comes from overseas. (Hmmmm, I’m betting those goods would find themselves on an exclusionary list from tariffs, anyway.)
Polling: I think the mistakes of 2016 are reversed this time: I’m betting there were plenty of people in red states saying they’re voting for Trump again this time but were just not going to admit out loud that they weren’t going to.