Trend Analysis

Market Strategy Radar Screen Weekly November 07, 2018


In this article:

  • Gridlock returns to the Hill as voters exited the polls last night.

RELATED ARTICLES:

Goldilocks Has Left the Building

By John Stoltzfus,
Chief Investment Strategist

What a Diff’rence a Day Makes

By John Stoltzfus,
Chief Investment Strategist



Give Peace a Chance

Gridlock returns to the Hill as voters exited the polls last night.


Key Takeaways

 

  • Democrats win the House, Republicans keep the Senate.
  • International markets celebrate the US two-party system at work.
  • US futures indicated higher open for domestic equities.
  • Looking ahead, overall midterm election results look positive for equity markets in the US and international realm.
  • Trade war resolution and Fed monetary policy remain center stage for global investors to ponder.

 

Election Outcome

 

The midterm election moves into the rear-view mirror as Democrats win back the House of Representatives and the Republicans maintain their leadership of the Senate. Both sides claim victories from the outcome of the election.

 

The dollar weakened, and stocks rallied overnight in Asia and moved broadly higher in Europe as the news crossed the tape. Stateside equity futures moved higher before the opening. Bonds rallied modestly. Pollsters regained some credibility as the outcome of US elections came out pretty much in line with expectations.

 

While political pundits begin to ponder what the outcome likely means down the road, markets globally celebrate America’s two-party system.

 

Quick Take

 

The outcome of the election could see at least some action on infrastructure and drug prices favored by “both sides of the aisle.”

 

Prospects for the administration’s Tax Cut 2.0 and The Wall fade hard.

 

The trade war and Fed monetary policy remain center stage in starring roles to garner market participants’ attention.

 

We see the results of the election as overall positive for the political system, the economy, and the global markets. The devil’s in the details, so investors shouldn’t expect to hear the proverbial whistle blow an “all clear signal.”

 

We remain positive on the outlook for the US economy and global equity markets, and expect cyclical sectors to likely outperform. Consumer Discretionary, Information Technology, Industrials, and Financials remain among our favorites.

 

 


Other Disclosures

This report is issued and approved by Oppenheimer & Co. Inc., a member of all Principal Exchanges, and SIPC. This report is distributed by Oppenheimer & Co. Inc., for informational purposes only, to its institutional and retail investor clients. This report does not constitute an offer or solicitation to buy or sell any securities discussed herein in any jurisdiction where such offer or solicitation would be prohibited. The securities mentioned in this report may not be suitable for all types of investors. This report does not take into account the investment objectives, financial situation or specific needs of any particular client of Oppenheimer & Co. Inc. Recipients should consider this report as only a single factor in making an investment decision and should not rely solely on investment recommendations contained herein, if any, as a substitution for the exercise of independent judgment of the merits and risks of investments. The strategist writing this report is not a person or company with actual, implied or apparent authority to act on behalf of any issuer mentioned in the report. Before making an investment decision with respect to any security discussed in this report, the recipient should consider whether such investment is appropriate given the recipient's particular investment needs, objectives and financial circumstances. We recommend that investors independently evaluate particular investments and strategies, and encourage investors to seek the advice of a financial advisor. Oppenheimer & Co. Inc. will not treat non-client recipients as its clients solely by virtue of their receiving this report. Past performance is not a guarantee of future results, and no representation or warranty, express or implied, is made regarding future performance of any security mentioned in this report. The price of the securities mentioned in this report and the income they produce may fluctuate and/or be adversely affected by exchange rates, and investors may realize losses on investments in such securities, including the loss of investment principal.

 

Oppenheimer & Co. Inc. accepts no liability for any loss arising from the use of information contained in this report. All information, opinions and statistical data contained in this report were obtained or derived from public sources believed to be reliable, but Oppenheimer & Co. Inc. does not represent that any such information, opinion or statistical data is accurate or complete and they should not be relied upon as such. All estimates and opinions expressed herein constitute judgments as of the date of this report and are subject to change without notice. Nothing in this report constitutes legal, accounting or tax advice. Since the levels and bases of taxation can change, any reference in this report to the impact of taxation

 

INVESTMENT STRATEGY

should not be construed as offering tax advice on the tax consequences of investments. As with any investment having potential tax implications, clients should consult with their own independent tax adviser.

 

This report may provide addresses of, or contain hyperlinks to, Internet web sites. Oppenheimer & Co. Inc. has not reviewed the linked Internet web site of any third party and takes no responsibility for the contents thereof. Each such address or hyperlink is provided solely for the recipient's convenience and information, and the content of linked third party web sites is not in any way incorporated into this document. Recipients who choose to access such third-party web sites or follow such hyperlinks do so at their own risk. The S&P 500 Index is an unmanaged value-weighted index of 500 common stocks that is generally considered representative of the U.S. stock market. The S&P 500 index figures do not reflect any fees, expenses or taxes. This research is distributed in the UK and elsewhere throughout Europe, as third party research by Oppenheimer Europe Ltd, which is authorized and regulated by the Financial Conduct Authority (FCA). This research is for information purposes only and is not to be construed as a solicitation or an offer to purchase or sell investments or related financial instruments. This report is for distribution only to persons who are eligible counterparties or professional clients and is exempt from the general restrictions in section 21 of the Financial Services and Markets Act 2000 on the communication of invitations or inducements to engage in investment activity on the grounds that it is being distributed in the UK only to persons of a kind described in Article 19(5) (Investment Professionals) and 49(2) High Net Worth companies, unincorporated associations etc.) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended). It is not intended to be distributed or passed on, directly or indirectly, to any other class of persons. In particular, this material is not for distribution to, and should not be relied upon by, retail clients, as defined under the rules of the FCA. Neither the FCA’s protection rules nor compensation scheme may be applied. This report or any portion hereof may not be reprinted, sold, or redistributed without the written consent of Oppenheimer & Co. Inc. Copyright © Oppenheimer & Co. Inc. 2015.


About John Stoltzfus

John is one of the most popular faces around Oppenheimer: our clients have come to rely on his market recaps for timely analysis and a confident viewpoint on the road forward. He frequently lends his expertise to CNBC, Bloomberg, Fox Business channel and other notable networks.

Full Profile