Its election day and the markets are holding steady while the results from across the country come in. The sheer volume of contested seats this time around is making for a robust election cycle. There are 435 house seats up for grabs and 35 senate seats.
At the close the Dow was up 173 points at 25,635. Trading volume was lower for the Dow but higher for a resurgent NASDAQ which bounced back from yesterdays selloff.
In this corner is bear market guru David Stockman. David is a regular on CNBC, former Goldman Sachs partner, author and former budget director under President Reagan. David is predicting a 40% market correction thanks to the insane trade war with China and a bull market that has run far too long and is currently hitting peak earnings. In the other corner is bull market guru Brian Wesbury, Chief Economist at First Trust, University of Montana grad, honorary member of the Westport Mafia and affectionately known as “Mr. Sunshine”. Brian thinks markets are currently undervalued. He is saying that earnings growth will continue. He feels the trade war with China is working itself out and deregulation, coupled with corporate tax cuts are setting the US economy up for a sustained run. He also thinks stock buybacks will continue and that wage and GDP growth will accelerate higher and feels stocks have 12% upside from current levels. Now if I could only tell which guru is correct, I too could be a guru. However, on this case I will lean toward Mr. Sunshine partly due to David’s dismal track record and partly knowing that markets tend to always go higher after a midterm election. A trend which hopefully will continue.