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The stock market is sending signals that a Biden-led blue wave is getting less certain, says one Wall Street strategist

The stock market is sending signals that a Biden-led blue wave is getting less certain, says one Wall Street strategist

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  • While the polls suggest a blue wave victory is in reach for Democrats this November, the stock market isn’t so sure, according to a note from Evercore ISI.
  • Wall Street strategists have been forecasting that a blue wave would likely be positive for stocks on hopes of a large stimulus deal shortly after the election, which would help spur a surge in value and cyclical stocks.
  • But this week’s rotation out of value and into tech suggests that chances of a blue wave in November are less likely, according to the note.
  • Visit Business Insider’s homepage for more stories.

Wall Street is increasingly expecting a blue wave victory for Democrats this November after the polls close, which would likely lead to the reflation trade: a surge in cyclical and value stocks at the expense of technology and growth stocks.

But recent trading activity in the stock market suggests odds of a blue wave are less likely, according to a Tuesday note from Evercore ISI. 

Specifically, this week’s rotation out of small cap and value and into large cap and growth could be chalked up to declining odds of a Democratic sweep, according to the note.

The firm pointed to the October surprise in North Carolina’s Senate race between Republican Thom Tillis and Democrat Cal Cunningham as evidence for declining chances of Democrats overtaking the Senate.

“The Democratic ‘dream fiscal program’ odds are lower,” Evercore said as explanation for what is driving the rotation back into tech.

Read more: Jeff James has crushed the market this year thanks to a stock pick that’s soared 1,155%. He shares another bet he expects to deliver similar returns – and lays out 3 additional opportunities in tech.

The firm did concede that other factors could be moving tech stocks, including excitement

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A Wall Street chief strategist says US lawmakers need a deal on fiscal aid – even a small one will help save consumer spending

A Wall Street chief strategist says US lawmakers need a deal on fiscal aid – even a small one will help save consumer spending

FILE PHOTO: Traders gather at the booth that trades Abbott Laboratories on the floor of the New York Stock Exchange, December 10, 2012.   REUTERS/Brendan McDermid
Traders gather at the booth that trades Abbott Laboratories on the floor of the New York Stock Exchange


  • Crossmark Global Investment’s chief market strategist Victoria Fernandez told CNBC’s “Trading Nation” Tuesday US lawmakers need to decide on a fiscal package, even if it is smaller in size, to save consumer spending.
  • She said consumers have almost spent their consumer checks which is worrisome going into the holiday season. 
  • “Even if it is a smaller number, or a one-time check, it is going to give support to that consumer as we go into the last quarter of the year and that is where you need to start looking at your portfolio to balance that out a little bit,” she said. 
  • She said investors should look at a combination of growth and value stocks, as well as different segments of the financial services sector to weather uncertainty. 
  • Visit Business Insider’s homepage for more stories.

US lawmakers need to decide on a fiscal stimulus package, even if it is a smaller one, to prop up consumer spending, particularly going into the holiday shopping period, Victoria Fernandez, chief market strategist at Crossmark Global Investments told CNBC’s”Trading Nation” Tuesday 

“We really need that consumer to hang in there. For that to happen, we will need to see another round of stimulus, even if it is a smaller deal, or not the $600 we saw before,” she said. “Even if it is a smaller number, or a one-time check, it is going to give support to that consumer as we go into the last quarter of the year and that is where you need to start looking at your portfolio, to balance that out a little bit.”

With around 10 million Americans still out of work, many consumers will have long since spent their

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Why the stock market’s sharp rally off March lows is even stronger than in seems, according to one Wall Street chief strategist

Why the stock market’s sharp rally off March lows is even stronger than in seems, according to one Wall Street chief strategist



a group of people standing in front of a computer: Bryan R. Smith/AFP/Getty Images


© Bryan R. Smith/AFP/Getty Images
Bryan R. Smith/AFP/Getty Images

  • The market’s leadership is wider than perceived and consists of more than just the largest tech stocks, James Paulsen, chief investment strategist at The Leuthold Group, said Friday.
  • While cyclical sectors trail the S&P 500 by 5% on a market-weighted basis, they exceed the benchmark on an equal-weighted basis, Paulsen highlighted.
  • Similarly, the S&P 500’s outperformance over the small-cap-focused S&P 600 is halved when market weighting isn’t taken into account.
  • Strong gains from tech giants “distorted many traditional market signals” and possibly shifted investors’ views of the market, the strategist added.
  • Visit the Business Insider homepage for more stories.

Cyclical and small-cap stocks aren’t getting the credit they deserve for the market’s rapid recovery, James Paulsen, chief investment strategist at The Leuthold Group, said Friday.

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Tech giants played an undeniably large role in lifting indexes from their March lows. Crowding in mega-caps hit dot-com-era levels, and their outperformance led the Nasdaq to be the first major index to erase its pandemic-induced losses. Strategists warned of a bubble forming in the market and that leadership in the months-long rally was dangerously thin.

Yet certain gauges suggest the bull market’s drivers are more varied than just the popular tech giants. While cyclical sectors trail the S&P 500 by roughly 5% on a market-weighted basis, they’ve made a full recovery from the March trough and now outpace the benchmark on an equal-weighted basis, Paulsen said.

Read more: ‘The largest financial crisis in history’: A 47-year market vet says the COVID-19 crash was merely a ‘fake-out sell-off’ — and warns of an 80% stock plunge fraught with bank failures and bankruptcies



chart: Leuthold Group


© Leuthold Group
Leuthold Group

“Cyclicals have not done as well as the FAANGs — few stocks have — but relative to

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The stock market won’t see the bullish outcome it’s expecting from a Biden win unless there’s a full blue wave, a JPMorgan stock strategist says

The stock market won’t see the bullish outcome it’s expecting from a Biden win unless there’s a full blue wave, a JPMorgan stock strategist says

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Traders look on after trading was halted on the floor of the New York Stock Exchange (NYSE) in New York, U.S., March 18, 2020


  • JPMorgan Private Bank’s Monica DiCenso told Bloomberg on Friday that the stock market won’t see the bullish outcome it’s expecting from a Biden win unless there’s a blue wave victory. 
  • The head of US equity strategy said that it will be difficult for Biden to pass a large stimulus bill without Democratic control of the Senate. 
  • The stimulus would also offset higher corporate taxes that are likely under a Democratic administration, she said. 

JPMorgan Private Bank’s head of US equity strategy told Bloomberg on Friday that the stock market won’t see the bullish outcome it’s expecting from a Joe Biden victory unless there’s a full blue wave outcome.

“It does appear increasingly likely that we see a blue wave and I think that is what the market is pricing in right now when you see equities continue to move,” Monica DiCenso said.

The strategist explained that it will be much harder for Biden to pass a large stimulus bill without Democratic control of the Senate, and said: “I really do think you probably need the blue wave for the real bullish outcome that many people are talking about to come to fruition.” 

DiCenso added that the stimulus, combined with continued low interest rates, will be the “perfect backdrop for equities over the near to intermediate term.”

While some investors are nervous that a blue wave will be negative for stocks because Biden’s corporate tax hikes will crush company earnings, DiCenso said the stimulus spending will offset higher taxes.

Read more: Fund manager Brandon Nelson is tripling his benchmark in 2020 with ‘less-discovered’ companies that become big winners. Here are 3 themes and

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Gridlock over new stimulus measures is the biggest catalyst for market volatility right now, a chief strategist says

Gridlock over new stimulus measures is the biggest catalyst for market volatility right now, a chief strategist says

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  • The lack of progress in reaching an agreement on US fiscal stimulus is the biggest “catalyst” of market volatility for stocks right now, National Securities’ chief market strategist Art Hogan told CNBC Wednesday. 
  • He said: “The No. 1 catalyst in this market causing the most volatility is the path of fiscal policy and whether we can get that out of the Beltway.” 
  • Hogan said markets are less concerned about the US election result. 
  • US president Donald Trump signaled an end to stimulus talks this week, but later called for a standalone bill to help the airline industry. 
  • Visit Business Insider’s homepage for more stories.

The gridlock in Washington DC between US lawmakers over a new economic stimulus package is the biggest catalyst for market volatility, rather than the upcoming election, National Securities’ chief market strategist Art Hogan told CNBC’s “Trading Nation” Wednesday. 

“The number one catalyst in this market causing the most volatility is the path of fiscal policy and whether we can get that out of the Beltway,” Hogan said. “We need more fiscal policy stimulus. We’ve heard that from the Fed. We’ve certainly heard that from economists.” 

US president Donald Trump ended talks between Democrats and Republicans until after the election on Tuesday. He later urged lawmakers to approve $1,200 stimulus checks for American taxpayers, small business aid, and direct assistance to airlines to prevent layoffs.

Democrats and Republicans have been stuck in a stalemate over the size of the next fiscal plan since July, although House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin have signaled that they have made some progress in recent days.

But even though a full fledged fiscal plan is unlikely before the US election, markets watchers have been welcoming the prospects for a standalone bill for

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