With stock market profits soaring the past couple of years outside a few bumps in the road, Wall Street has been in love with President Donald Trump’s pro-business environment. Corporate taxes have been cut, regulations have been rolled back and profits have poured in.
But that could soon change as the midterm elections are finally here, and there is one scenario that will be a “disaster” for the stock market.
With the Democrats likely to take the House and Republicans likely to hold onto the Senate, there will likely be “some negative fallout” for the stock market due to gridlock in Congress. Sadly, there is no “sound money” on the ballot, but here’s how things could shake out, per The Economic Collapse:
Steve Massocca, Wedbush Securities managing director said there could be some negative fallout from a split Congress, since Democrats would hold committee chairmen seats in the House. “To what extent are they able to disrupt the Trump agenda will weigh on peoples’ minds,” he said.
“Donald Trump, the agenda, is very good for the markets. Less regulation, lower taxes,” he said.
The feeling is that a split Congress is unlikely to move stock market prices too much one way or the other. However, if Democrats are able to take both houses of Congress, that would be a nightmare scenario for Wall Street, Massocca says.
The least likely scenario—a Democratic sweep— is also seen as the most negative for stocks.
“Disaster,” said Massocca.
If the Republicans are somehow able to hold onto both houses of Congress, watch out for some serious “bed-wetting” from the left — and cheers from Wall Street.
Haunted by memories of 2016, liberals around the country are riven with anxiety in the campaign’s homestretch. They’re suspicious of favorable polls and making election night contingency plans in case their worst fears come true. Some report literal nightmares about a Democratic wipeout.
“We’re kind of just in the bed-wetting phase now,” said Democratic pollster John Anzalone, a Hillary Clinton campaign alumnus who spent election night 2016 in Clinton’s Manhattan war room.
If the Democrats are unable to take the House, that will probably mean that a late “red wave” has saved the day for the Republicans and it will also probably mean that they will likely increase their Senate majority by a little bit.
In that scenario, we will see a lot more than “bed-wetting” from the left. Their hopes have been pinned on these midterm elections for nearly two years, and a crushing loss could set off a national temper tantrum of frightening proportions.