A panel of the Fox Business Network agreed on Monday that the stock will continue to rise as long as the Republicans have the Senate under control on election day, which would lead to a “stalemate” and block the passage of legislation.
Host Stuart Varney and longtime speaker and investment expert Dennis Gartman discussed the reasons why the stock market has reached “all-time highs” just weeks before a potentially controversial presidential election. Varney said that stocks will remain strong whether President Donald Trump is re-elected or former Vice President Joe Biden takes office, as Trump will cut taxes and Biden will “spend a lot”. But Varney and Gartman said the biggest political concern was a “Democratic blowout” in which they would take over the White House and majorities in both houses of Congress.
Gartman warned that while Republicans must retain the Senate majority to keep the stockpiles high, the retention of Federal Reserve Chairman Jerome Powell was probably the more important factor. Gartman said he believed that Biden would defeat Trump on November 3.
“It looks like the Republicans can hold the Senate, the race that really matters is what’s happening in North Carolina, where the Democratic lead candidate [Cal Cunningham] is probably now trailing after a marital problem he had. That takes away one of the fears that you [host Varney]explained that there would be a tidal wave of Democrats,” said Gartman, who is now chairman of the University of Akron Foundation Investment Committee.
“I don’t think [the Democrats]will win the Senate, and as long as the Republicans hold the Senate, it will bring us to a standstill, and I’m always a big fan of standstill because nothing is really being done,” Gartman added.
“But there will be a passage on infrastructure spending, and there will be much higher spending next year, regardless of who the president is. So for now, it’s still a bull market,” he continued.
Despite Gartman’s view in the wake of the Cunningham SMS scandal, the latest Reuters/Ipsos poll still shows that the Democratic challenger is incumbent Republican Senator Thom Tillis. Forty-seven percent of likely voters in North Carolina said they would vote for Cunningham, while 42 percent support Tillis. The numbers have hardly changed since Cunningham publicly apologized in early October.
Varney warned that if the Democrats took control of the House of Representatives, the Senate and the White House, it would be a signal for “neo-socialist America,” which could fuel stock prices. Moreover, a contested or protracted election could create instability that would do the same thing.
Both Varney and Gartman noted that as long as the Federal Reserve continues to print trillions of dollars, “no matter what happens,” the economy and stocks can remain bullish, a sentiment Gartman maintains in the Gartman letter he publishes for stock market insiders and investors.
“I’m not so politically concerned about change, but it seems that Mr. Biden will win the presidency unless something undesirable happens in his campaign, and I would like to see something else happen, but that seems to be the reality,” Gartman said.
“If Trump wins the election, he will lower taxes, which is good for stocks,” Varney said. “If Biden wins, he’ll spend a lot of money, which is good for the stock. It is predicted that the starting position for stock prices will improve”.
The president himself has repeatedly touted stocks as a partisan sign that his presidency is doing well. On Monday, the trump card was chirped: “ON THE EXCHANGE MARKET, 300 POINTS FURTHER – THE GREATEST LEADING INDICATOR OF ALL! DO NOT SPOIL IT WITH SLEEPY JOE!!!”
Tekk.tv asked both the Biden and Trump campaigns for additional comments on Monday afternoon, but did not receive any answers before the release.