A Post-Election Economic & Market Outlook In 10 Charts Or Less

All aboard ha ha ha ha ha
Ay, ay, ay, ay, ay, ay, ay

Crazy, but that’s how it goes
Millions of people living as foes
Maybe it’s not too late
To learn how to love
And forget how to hate

Mental wounds not healing
Life’s a bitter shame
I’m going off the rails on a crazy train
I’m going off the rails on a crazy train

(From “Crazy Train” by Ozzy Osbourne, 1987)

OK, so the election is sort of behind us—a great deal rests on the outcome of the dual Senate runoff elections in Georgia in early January. If the Democrats win both of those seats, they will control the presidency and both houses of Congress, and policy and legislative decisions going forward may take a very different turn than if there is a “divided government.” 

In the meantime, whatever the outcome, Americans will have to deal with the current and expected economic and market regimes. Over the past few months, we’ve published a Market Insights paper, a Mid-Year Outlook, and a follow-up asset allocation blog post that summarized our views prior to the election. 

But where do we see things going from here now that the election is (for the most part) behind us? In other words, regardless of the political landscape, what will the next Administration and Congress be handed from an economic and market perspective?

This is a blog post and not a position paper, so we will be succinct and focus on what we believe are the five primary economic and market signals that may provide perspective on where we go from here: GDP growth, earningsinterest ratesinflation and central bank policy. The caveats to these signals, of course, are the future course of the coronavirus pandemic and corresponding federal, state and local responses, and the outcome of the ongoing fiscal stimulus negotiations.

But those are “known unknowns.” Let’s focus on what we can currently observe.

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