Trump is not going quietly and fiscal stimulus will not come easily, but investors have big things to worry about.


2020 has already been a year for the record book, and some parts still have the hardest parts ahead.

One of the most controversial elections in recent US history has finally ended, but President Donald Trump refuses to accept it, even as a public health crisis endangering a spontaneous transfer of power, and Raising the specter of a constitutional crisis.

At the same time, it is clear to almost everyone that the economy needs more financial support, but no one can agree to do so in the event of doing so.

Nevertheless, sources who spoke to Marketwatch say that it is time to take a deep breath. The market will recover – choppy, but fine – and the Republic will live to see another day. What’s more, most say, Washington is not our biggest problem, even though it demands most of our attention.

“First of all, Joe Biden is the President of the United States regardless of what anyone reads or says,” T. Said capital market investment expert Chris Dillon for Rowe Price. He said, “We are not going to spend energy with speculation on chicken.” We are not wasting our intellectual capital on this. Remember when President Trump announced that the economy would reopen on Easter? We didn’t pay any attention then. We believe in America’s institutional power “

Behind the scenes in Washington, most players are acknowledging the reality that former Vice President Joe Biden is indeed president-elect and moving forward, said Stephen Myro, managing partner for DC-based Beacon Policy Advisors.

“We have an established process of how it works and everyone knows it,” said Myro, who co-founded Beacon after several decades in public service. “Trump doesn’t look at it like everybody else, and there’s nothing you can do about it. It is just a process of playing. It’s like your two-year-old who has a tantrum. It’s embarrassing, but it’s okay. “

And while some have focused on the Trump administration’s refusal to enable a smooth transition for Biden’s team, “To be honest, what team is going to brief them will be valuable?” Mero said. “I think the Biden team is going to come and assume that everything is wrong and broken until proven otherwise.”

S&P 500 Index SPX,
+ 1.36%
Has gained more than 5% since Election Day on November 5, noted Steve Blitz, chief US economist for TS Lombard.

He said, “The market is telling you what it is like, everybody needs to give Trump room, so that they do no harm and then he will leave. He will always say he lost wrongly but when Trump lost And said it was fair? Nobody is really worried about tanks on the road, “Blitz told Marketwatch.

Among these sources, there is little consensus from Congress about another fiscal relief package, but, curiously, all three analysts thought Wall Street had a role to play in achieving something.

See: How far does the stock have to fall for Washington to take action? You might not like the answer

“There are a lot of challenges to do in a lame duck session,” Myro said. Republicans might have a better view of the economy than Democrats, he said, reporting stronger jobs and promising vaccines sooner than expected, making them less likely to settle before January.

Biotech BNTX,
+ 4.30%
Pfizer & Inc., PFE
+ 2.85%
Last Monday announced that their vaccine candidate was 90% effective in Phase 3 clinical trials, raising stock prices this week.

Myro feels that risk has increased in the financial markets following Pfizer’s announcement, stating: “Now if the market is anything but optimistic about a return to normalcy.” With a vaccine, it is as if they do not care whether we get stimulation sooner or later. The market assures itself that if we don’t get more fiscal, the Fed will have to step up.

But Steve Blitz feels Congress will approve a smaller, stopgap package as part of its late-November budget negotiation process to keep the federal government open through the holiday period, and again in February Reflect on this issue. “Until then we may need a larger package to help people suffering from the virus,” he said.

But if Congress is unable to provide anything, Blitz said, “The only thing that will advance politics is the market.” Like we did in the spring. If there is sudden catering in the equity market, then everything is bipartisan. It’s done But if the market is still trading at a high level, then it is going to be difficult. “

Just to say: Washington should not be the largest of the markets. Must be COVID-19.

“The virus is still alive and well,” Dillon said in an interview. “Its momentum and lack of transition from Trump to the Biden administration without an organized federal response, even with Pfizer News, undermines the US in the near term. Now is not the time to become a hero in your asset allocation, even a supportive stimulating environment and more fiscal support is coming. “

It’s a cliché so far, but “volatility is expected in the short term,” Blitz said. “I think there is more downside risk than given valuations being upside down. I will have cash and I will wait. If the market falls, I will have price targets to buy stocks or sectors that are a Will do better in an economy where everyone is in the race to shop, eat, travel, be in the office again. Like Zoom ZM,
-5.84%
Went to the moon, it would be a slingshot. “

The US stock index hit a high in the most recent week, sparked by optimism about the vaccine, among other things. Dow Jones Industrial Average DJIA,
+ 1.37%
Closed at 29,479.81, after briefly trading above its previous closing. The S&P 500 set a new record at 3,585.15, as did the small-cap Russell 2000 RUT,
+ 2.08%
. Only the tech-rich Nasdaq Composite Index comp,
+ 1.02%
Was lower for the week, finishing at 11,829.29.

Economic data ahead of the week include retail sales and industrial production on Tuesday, housing starts on Wednesday, and current-home sales on Thursday.

Read next:These are ETFs to help you prepare for the post of BFT President.

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