Election day at last! The results are certain to have a profound impact on investors’ outlook for the economy, although no one can predict with confidence how things are about to turn out. My gut feeling is that Republicans will win big, rebuking a mainstream media whose polls are just as fanciful as they were in 2016. Regardless, if it appears that Republicans have retained a majority in both houses, stocks will move higher — probably sharply so for at least the first couple of days. If the GOP holds only the Senate, stocks will fall, possibly hard; but if the Republicans lose the upper house, be prepared for the worst — i.e., the ‘Trump rally’ in reverse.
The Democrats have promised a scorched-earth policy that will make Sherman’s March through Georgia look like the hokey pokey. Even if they don’t impeach Trump, they’ll launch endless investigations as pointless, destructive and draining as the Mueller probe. The consequences for the U.S. economy, and for governance itself, would be so grave as to be almost unimaginable. Indeed, the reason I believe Republicans will carry the day is that most voters deeply understand what a panoramic catastrophe it would be if the likes of Nancy Pelosi, Maxine Waters and Chuck Schumer are put back in charge. Even their supporters must know that a violent lurch to the left couldn’t possibly be good for the country — not that such thoughts will be on their vengeful minds when they pull the lever on Tuesday to vaporize Trump, his supporters and all they stand for.