It’s possible that Joe Biden may be the next President of the United States, but Congress will likely remain split. They say gridlock is good, and so far, stocks have soared higher. But better news on the vaccine and economic front has also sparked the bulls. This week, the LPL strategists discuss what it all means and why new all-time highs could be right around the corner.
Gridlock is good
Republicans added seats in the US House of Representatives and will likely maintain control in the Senate. This significantly lowers the chances of higher taxes and more regulation, and stocks historically have done quite well when Congress is divided.
Great news on the vaccine front
Monday morning Pfizer and BioNTech announced that their COVID-19 vaccine had a more than 90% efficacy rate, which is much better than expected. This could be a game changer in the battle against COVID-1, and we could be much closer to opening the economy back up than expected. As a result, many of the market’s economically sensitive areas are soaring.
Economic momentum continues
There are many worries out there, but the US economy continues to improve. Just last week, manufacturing data came in near a two-year high, while jobs and services data both impressed. But it’s the earning season that might be the most impressive, as more than 85% of S&P 500 companies have beaten earnings expectations—a record.
Tune in now
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All index data is from FactSet.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
This Research material was prepared by LPL Financial, LLC.
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