Equities surged on an apparent Biden victory and a divided government that lowers the probability of a radical re write of the Constitution and the repeal of some of President Trump’s pro-business tax policies.  Equities were also inspired by Senate Majority Leader McConnell’s comment that a stimulus package will be passed by year end.

As expected, legal action is beginning.  The Trump Campaign is suing both Michigan and Pennsylvania to halt the vote count to ensure “voter integrity.”  Moreover, the President is demanding a recount in Wisconsin given the race is within 1 percentage point.

As indicated legal action was widely expected.  The WSJ opined on election eve “May the best lawyer win” as both sides massively lawyered up.

At the time of this writing, the President can still win if he wins PA, North Carolina, Georgia and Nevada.   Biden would win if he wins Nevada.  And then there is Arizona which some believe is still in play.

I have been following politics for many years and this is the first time that I am aware Nevada is the potential lynch pin of a national election.  It is always, Ohio, PA and Florida.

I think all will agree the outcome of the 2020 election was an incredible surprise.  There was no “Blue Wave.”   The Republicans gained seats in the House as opposed to the projected 12-15 loss.  The Republicans maintained control of the Senate versus the consensus view of change in power.

Finally, the Presidential election was considerably closer than expected as Biden was projected to win by the greatest margin in over 36 years.

Barring any successful legal challenge or Trump’s very narrow pathway for victory, President Biden will become the forty sixth President by margin considerably lower than projected.

Winning is easy.  Now comes the hard part…governing.

Radically changing topics, today is a Fed meeting.  No change is expected in policy or statement.

Last night the foreign markets were up.   London was up 0.26%, Paris up 1.02% and Frankfurt up 1.60%.  China was 1.30%,  Japan up 1.73%  and Hang Sang up 3.25%.

The Dow should open moderately higher, perhaps on relief that there was not a “Blue Wave” and rising optimism about a significant stimulus package.  The 10-year is up 4/32 to yield 0.75%.


The views expressed herein are those of Kent Engelke and do not necessarily reflect those of Capitol Securities Management. The information contained herein has been compiled from sources believed to be reliable; however, there is no guarantee of its accuracy or completeness. Any opinions expressed are statements of judgment on this date and are subject to certain risks and uncertainties which could cause actual results to differ materially from those currently anticipated or projected. Any future dividends, interest, yields and event dates listed may be subject to change. An investor cannot invest in an index, and its returns are not indicative of the performance of any specific investment. Past performance is not indicative of future results. The material provided in Daily Market Commentaries or on this website should be used for informational purposes only and in no way should be relied upon for financial advice. Please be sure to consult your own financial advisor when making decisions regarding your financial management. Members of FINRA and SIPC, Capitol Securities Management is a privately owned full-service retail brokerage and investment advisory firm headquartered in Richmond, Virginia. For nearly 30 years, we have been serving the needs of our investors. Today, more than 200 Capitol Securities Management investment professionals and support staff serve approximately 18,000 customer accounts from Southern Florida to the New England coast.