ELECTION RESULTS – ALTHOUGH OUTRIGHT GRIDLOCK DID NOT OCCUR, WE WOULD LIKE TO PROPOSE THAT “QUASI-GRIDLOCK” IS PRESENT IN D.C. Yes, the Democratic Party controls all three silos of government with both Georgia Senate races flipping to their way; however, the pathway to a Blue Wave scenario that was once thought likely, still is not present in our estimation.

The Market has spoken and has given its “stamp of approval” on the backdrop in our Nation’s Capital. Whether it may be your political preference or not, the collective mindsight of tens of millions of investors we refer to as the “Market” feels comfortable based on the following:

ECONOMIC POLICY BACKDROP – THE TRIFECTA OF POLICY THAT IS IN PLACE IN OUR ESTIMATION PROVIDES A VERY STRONG BACKDROP THAT WILL PERMIT STOCKS TO CONTINUE AS OVERWEIGHTS IN OUR RESPECTIVE MODELS:

1. Low Corporate Taxes:
   The belief that Corporate Tax Policy likely remains in a period of Status Quo, i.e. no major revisions to what is in place today at the 21% rate. Investors certainly favor lower corporate taxes as they elevate the bottom line and hopefully, company stock prices.
   Source
2. Federal Government Spending:
   Although not the major Stimulus Bazooka that was imagined under a Blue Wave Scenario, a $2 Trillion deal is likely, that would include infrastructure spending, extended unemployment benefits and funds for worker retraining. Investors certainly favor the open spigot from our friends in D.C.
3. Accommodative Federal Reserve:
   Not only is the Fed in a holding pattern with Z.I.R.P. (Zero % Interest Rate Policy), but they are also committed to buying bonds of all stripes and colors. This includes Treasury, Mortgage and Corporate debt. Investors certainly favor a dovish Fed, and based on comments from Jay Powell and the recent appointment of former Fed Chair Janet Yellen as Treasury Secretary, accommodation remaining in full force for the next two years is highly likely.