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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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Schafer: Venture capitalists willing to fund insurance startups who try to crawl over ‘wall’

Schafer: Venture capitalists willing to fund insurance startups who try to crawl over ‘wall’

When health care firms that haven’t been around very long announce new venture-capital financing, it’s hard to miss the big numbers.

This year, $225 million went into an East Coast health insurance firm called Oscar and an additional half a billion dollars of equity was just raised by Bright Health of Minneapolis.

These firms are very much still startups, and you can hear a little Silicon Valley-style language in how they talk about themselves.

Oscar claims to make health insurance simpler and easier to understand, yet it describes itself as “the first direct-to-consumer health insurer, pairing member engagement with our own full-stack technology.”

Well, that does sound better than having half-stack technology.

But the bigger point is how it’s at least a little surprising that upstarts can raise so much capital to jump into an industry with so many barriers to entry.

Health care is highly regulated, both nationally and state-by-state, and relies on a hopelessly complex payment system the incumbents have all mastered.

Scale matters, too, including the benefits of operating with a brand people respect when the stakes — health care and what it costs — are so high.

Yet entrepreneur and venture capitalist Tony Miller said it’s a much different world in venture finance than it was 10 years ago.

And the first half of the year “produced the largest two-quarter investment period ever for venture-backed health care companies,” according to Silicon Valley Bank.

To illustrate his point, Miller talked about the 2013 zombie apocalypse film “World War Z,” starring Brad Pitt, where the Israelis somehow anticipated the zombies would come and built a wall to keep them out.

The problem of relying on a wall, though, is once the wall is scaled or breached the zombies run wild.

The health care system seems similarly walled off,

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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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A Significant Majority Of Democrats And Republicans Support Strong Consumer Protection Regulations And Tougher Rules For Wall Street

A Significant Majority Of Democrats And Republicans Support Strong Consumer Protection Regulations And Tougher Rules For Wall Street

It has been ten years since the Wall Street Reform and Consumer Protection Act (Dodd-Frank) was signed. Given the complex nature of rule writing and the fact that fifteen regulators were involved, not all rules were finalized or implemented. Since Trump came into power, many of the rules that were finalized have been tailored and watered down. Yet, in the vast majority of both Democratic and Republican voters want strong consumer financial protections and tough regulation of the financial services industry.

Yesterday, in an Americans for Financial Reform and  Center for Responsible Lending sponsored-event, Lake Research Partners presented polling data, which shows that when in comes to a desire for tougher regulations for Wall Street, the word bipartisanship still exists.

Lake Research Partners’ key findings were:

·      Over nine in ten voters (91%) say it is important to regulate financial services and products to ensure they are fair to consumers, including 68% who say it is very important.

·      Nearly three-quarters of voters (74%) believe that Wall Street financial companies should be held accountable with tougher rules and enforcement, while only one in ten (10%) believe that their practices have changed enough that they don’t need further regulation.

·      More than half of voters feel that Wall Street and big corporations have gotten too much help from the government in response to the COVID-19 crisis (56%), while less than one in ten (8%) believe that they did not get enough help. Less than a quarter (23%) of voters feel that Wall Street received about the right about of aid.

·      Three-quarters (75%) of voters also believe there should be more government regulation of financial companies, such as Wall Street banks, mortgage lenders, payday lenders, debt collectors,

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