Stocks have turned timid, although it remains to be seen whether the moderate selling that ended the week will gain momentum as Biden’s inauguration approaches. Regardless, the smell of distribution is in the air, and it is not subtle. As the tempo of it picks up, expect DaBoyz to work overtime trying to convince us that Wall Street is down with the Democrats. Big Business owns Biden, right? Well, yes and no. It’s true that the Silicon Valley muckety-mucks have less to fear from him than from Trump. But there’s no getting around the scary fact that this will mark the most radical political change in U.S. history. Most of Biden’s appointees are familiar faces from the Obama years, and that has reassured those who hope to benefit from the Democrats’ electoral sweep. But the political checks and balances that existed when Obama was president no longer obtain, and one-party rule could conceivably run amok in ways that Biden’s corporate cheerleaders have failed to anticipate.
A Fragile Economy
For the time being, though, the vaccine program will get most of the attention. Biden and the Democrats will own it in just a few days, but its success is hardly assured. His procedures and protocols for dealing with the pandemic are unlikely to differ much from Trump’s, since there is not enough hard science to justify changing things radically. The danger is that even a small tightening of the lockdown could undo an economy whose fragility has been masked by the powerful bull market in stocks. Do the Democrats understand this? We may be about to find out. But there should be no illusions in the meantime that the Democrats, cozy as they are with Silicon Valley and social media’s opinion-shapers, will be great for stocks.