Monday, September 25, 2023

What a Biden presidency could mean for your wallet

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Hello, Bull Sheeters! The 46th President of the United States will be sworn in today and the mood in the markets is optimistic. Cautiously optimistic.

The source of investor exuberance comes more from Wall Street than from Washington, it must be said. A host of wins beats those like Netflix, Goldman Sachs and Bank of America yesterday is fueling the mood for risk. More big names are reporting today.

Are you still worried about the impact the prospect of one-party rule in Washington will have on your wallet? I have you covered in today’s essay.

But first, let’s see where investors are putting their money.

Market update


  • The main Asia Index are mainly higher in afternoon trade with Hong Kong Hang Seng high 1.1%.
  • Jack Ma is back. China’s best-known and most visible tech entrepreneur makes his first public appearance in two months. Investors cheered, sending in shares Ali Baba 9.3% higher at some point on Wednesday.
  • Bow down, Taiex. Taiwan stock market soared 92% over the past four years, win the crown of best performing stock market of the Trump years.


  • theEuropean scholarshipswere mostly higher in the first exchanges with theStoxx Europe 600 high 0.2% one hour after the start of the trading session.
  • The chip boom was good news for the Dutch tech giant ASML, who reported a big beat of earnings Wednesday.
  • The European Union wants the euro to be the emerging currency of world trade, starting with green finance. The euro was up this morning after the European Commission yesterday presented its plans to strengthen the common currency.
  • Italian Prime Minister Giuseppe Conte survived a vote of no confidence Tuesday night, but the government emerges weaker than ever. His sworn enemy, Matteo renzi, the former mayor of Florence, would need to reread another Florentine, Machiavelli. Renzi’s attempt to overthrow the government was like placing a sticky wad of chewing gum on the professor’s seat.


  • American Futuresare slightly up this morning. It was after the three exchanges closed on Tuesday in the green, helped by decent earnings companies like Bank of America and Goldman Sachs.
  • Netflix shares soar in pre-market trading this morning, up 12.3%. It’s after the streaming service absolutely crashed last trimester, attract 8.5 million new subscribers to shows like “Bridgerton” and “The Queen’s Gambit”. Who knew there were so many chess fanatics out there?
  • In today’s earnings schedule we have: Morgan stanley, Procter & Gamble and United Airlines, to name a few.

Somewhere else

  • Goldis on the rise, trade above $ 1850 / ounce.
  • thedollar is off.
  • Grossis in place, with Brent trading above $ 56 / barrel.
  • BitcoinEast down 4.3% in the last 24 hours at $ 35,700.


Tangled in blue

It’s inauguration day, so I’m going to dive back into the archives to borrow an article I wrote in October, on the eve of election day, for our last Quarterly investment guide. (Programming note: Fortune will publish the next QIG in the coming days; Stay tuned.)

At the time, Donald Trump had just fallen with COVID-19 (yes, that was just a few months ago), and markets continued to climb as Wall Street began to assess the prospects for a sweep. blue.

BMO Capital Markets bond analyst Ian Lyngen wrote in a note to investors at the time that a Joe Biden win “could prove to be a decidedly positive event for domestic stocks.”

Lyngen succeeded. The S&P 500 is up more than 12% since the start of the fourth quarter.

This performance might surprise some people. “Usually,” I wrote at the time, “Wall Street hates one-party control. And, if anything, he usually prefers a low-tax, law-breaking Republican in the Oval Office. This anxiety runs deep, even if historical data does not quite support the paranoia. “

History has shown that, yes, the S&P performed better in the years of divided party control. But, as the chart here shows, the U.S. economy has performed better in years when there is a Democrat in the White House and a Congress controlled by Democrats.

This trend will almost certainly continue this year as economists expect the U.S. economy to rebound strongly in 2021, helped by a wave of stimulus spending. After the run-off election in Georgia, Goldman Sachs raised the U.S. growth rate from 2021 to 6.4 percent. Incidentally, Goldman also marked a 13% rise in the S&P this year, more or less in line with the historical average for a Democrat-controlled Washington (see graph above).

Now we all know that past performance is no indicator of future returns. And, of course, a new axis of power in Washington will mean there will be a new batch of winners and losers. The dollar is clearly in the latter camp. Small-cap stocks are squarely in the first, with investors betting on a return to the US economy.

Of course, a tax hike is looming. And American finances are a basket case. But the markets ignore all of this. Not yet, anyway.

And of course, we’ll keep you posted if anything is about to change.



I’ve heard from a lot of Bull Sheet readers over the past 24 hours. I can promise you this: I will share with you in the coming days our recipe for the exquisite Ribollita, a sturdy dish for the dead of winter.

Turns out we never wrote it down, so I’m going to have to take some notes and check them with my criminal partner.

In the meantime, look for pork bones at your butcher. You will need it for this recipe.


Have a very good day everyone. I’ll see you here tomorrow… Until then, there’s more news below.

Bernhard Warner

As always, you can write tobullsheet@fortune.comor reply to this email with suggestions and comments.


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