by Paul Christopher, CFA, Head of Global Market Strategy and Gary Schlossberg, Market Strategist
- We expect that the presidential and Senate races will be closely contested and decided, by voter reaction to the president’s handling of nationwide protests in May and June, and by how well the U.S. economy’s reopening is managed.
- Based on current polls, we view the most likely outcome as a divided federal government, which should moderate, or even block, the most ambitious policy initiatives of any president. We believe that the main alternative scenario is single-party government leadership, led by the Democrats.
- Fast-changing economic dynamics and the unusual nature of this economic cycle lead us to conclude that it is premature for investors to change portfolio allocations based only on projected election outcomes. We prefer to maintain our current tactical allocations.