Election Day jitters aren't plaguing Wall Street. The Dow was up more than 600 points in morning trading, more than 2%, and the S&P 500 and the Nasdaq also were up by more than 2%. What the Wall Street Journal reads into this: Investors are betting that Joe Biden will win the White House and Democrats will take control of Congress, a series of events that would likely translate into a hefty stimulus package in a new White House. "If any party holds the power of ... the Senate, House, and the presidency, that's the surest win for a stimulus deal, and that scenario is easier to do with a Democratic leadership because they already have the House," says Paul Sandhu of BNP Paribas Asset Management.
A post at MarketWatch agrees that, in investors' minds, a clean Democratic sweep would be the best outcome for the purposes of a stimulus. But it suggests investors also wouldn't mind a victory by President Trump, provided it's a clear-cut one, with Republicans keeping control of the Senate. "The worst-case scenario is a disputed outcome that could result in weeks of legal battles and political jockeying," write William Watts and Mark DeCambre. (Trump, for his part, is predicting he'll do better in 2020 than he did in 2016.)