Wall Street Increasingly Expects a "Blue Wave" in Next Month's Election
Such an outcome would give Democrats a majority in both chambers of Congress
Wall Street firms are increasingly advising their clients to prepare for a "Blue Wave" of victories in next month's national election. Such an outcome would land Joe Biden in the White House and give Democrats a majority in both chambers of Congress.
In the past month, at least five of Wall Street's top strategists have sent reports to investors predicting a Democratic sweep. Goldman Sachs told clients in a research note earlier this week that the odds of Biden winning the presidency and Democrats gaining a majority in the Senate is roughly 65 percent. Analysts with the investment bank pointed out that stock prices have been rising since September, coinciding with political polls tilting increasingly toward Biden.
Goldman also wrote that stocks and other investments that tend to rise when investorshave lead the market higher since mid-September. This "reinflation trade," as it is called on Wall Street, is being fueled in part by expectations that a Blue Wave next month will increase the likelihood of lawmakers approving another major round of federal , cash payments for Americans and other stimulus measures.
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