The surprising stock market

I follow only the Australian stock market but it generally mirrors Wall st. and I gather that it is still doing so at the moment

The surprise is how robust stock values are at the moment. The lockdowns knocked about 12% off the value of my portfolio but the election has substantially reversed that.  My portfolio is now only about 6% down on where it was

There were a lot of pundits who said the market was in for a big fall. So what happened?  It seems to be that investors now expect gridlock in American politics.  And gridlock is something conservatives rather like.  If there is no agreement in politics, no new laws will be passed and no new regulations will be issued.  That means that businesses have to cope with market challenges only, not political changes.  While the politicians are squabbling with one another, it gets them off the back of business

There was a good example of that during the British prime ministership of the unfortunate Theresa May.  Her weak leadership plus a near balance in the House of Commons  meant that very little got done politically.  And British business boomed at that time.

So it seems that U.S. business is expecting something similar now.  And that expectation will be well and truly fulfilled if, as expected, the GOP retains control of the Senate.  

And over the last 4 years the GOP has very largely become the party of Trump. His attitudes and policies have not only won huge approval among the GOP rank and file but have also percolated into the thinking of most Senators, the contemptible Mitt Romney being the obvious exception.  But even waverers like Romney, Collins and Murkowsky have generally gone along with the rest of their Senate colleagues anyhow.  So a Senate dominated by Trump thinking will be a total roadblock to any of the insane new legislation that Biden has proposed.

And note that the GOP has also done well both in the House and in picking up State governorships. So even if sufficient new votes are "found" to deny the GOP complete control of the Senate, Congress as a whole will end up finely balanced and should as such fulfil its traditional role as a brake on change. Getting a majority for anything in either house is not easy. Only measures with a considerable degree of consensus behind them normally get up.   

It took the first two years of his presidency for Obama and his supporters to get Obamacare through, during which little else got done

And I haven't even  mentioned yet the now very conservative Supreme Court.  The one big thing that conservatives wanted from Trump was to rebalance the Supreme Court and he achieved exactly that.  And the Supreme court has a proven ability to knock on the head any adventurous legislation or regulations

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