Think About This
INVESTMENT RESEARCH
EXECUTIVE SUMMARY
Fiscal stimulus and monetary stimulus are part of the same ‘ Institutional Insurance Policy ’; valid coverage that is in the process of paying out .
Although essential the fiscal cheques are currently stuck in production . Partisan politics and the imminent election are unhelpful impediments .
There are two methods to open the spigot : Republican capitulation or a ‘ Blue Wave ’.
With Trumps campaign faltering and Democrats running down the clock , the latter is significantly more likely than the former .
But this is not plain sailing for markets . Remember Democrat ' s tax policy can knock about 12 % off S & P 500 2021 EPS . The revenue from subsidized consumption won ’ t all accrue to shareholders .
In addition , for unfettered spending Democrats need to take the Senate ; a more difficult prospect than taking the White House . Besides any delay adds to economic scarring .
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