While many market participants believe that a Biden victory, or a “blue sweep” in the upcoming presidential election, would be negative for stocks and put tension in the market, JPMorgan’s Marko Kolanovic is not so sure.
In a note thursday, Kolanovic said that whatever the final results of the November election, his solution will be a positive catalyst for the market. The conclusion of the election will be a significant threat of uncertainty that has lately hanging in the minds of investors.
In all 3 scenarios, stocks will increase, according to Kolanovic.
The inventory market is expected to go up even higher if Biden wins the election, but Congress is divided because it would be difficult for Biden to pass his proposed tax reform policy.
Read more: BlackRock’s chief investment officer explains why Congress is passing a fiscal stimulus circular that is “pretty dire” for markets and the economy, and identifies sectors that will benefit from either scenario.
Stocks move higher, according to Kolanovic, if President Trump wins re-election in a prestigious quo scenario.
However, there are still excessive threat scenarios and out-of-control progress after the election can lead to a drop in stocks, Kolanovic said. Investors cover their exposure to stocks with S-seed.