Democratic Control of Congress Would Bring New Risks for Stocks

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Watching developments around georgia's senate runoffs with these elections set to determine control over the chamber and the balance of power in congress so far investors have largely assumed that republicans will maintain control of the senate albeit with a very narrow majority given. The party's recent tendency to wins in seats especially in off cycle elections still polls so far have shown a razor thin lead for both democratic candidates voting for the elections ends on tuesday georgia assigned republicans. So far have fifty seats in the senate. Democrats forty eight meaning that a democratic sweep of both seats in the state would give them a majority. Since vice president-elect kamla harris would be able to cast tie-breaking votes under a republican controlled. Congress president elect joe biden would have limited latitude to advance many of his campaign promises including raising corporate taxes and minimum wages and unveiling reforms around education housing and climate change which could all impact various pockets of the market but under a unified democratic government. A larger additional stimulus package that could further boost the economy in the near term. Might transpire a senate with a democratic majority with the to greater fiscal stimulus. We would expect around six hundred billion dollars more on top of the recently enacted nine hundred billion dollars but would also likely mean tax increases to finance additional spending goldman sachs. Economists led by jahn hotseat said a note tuesday regarding the ladder we would expect that an evenly divided senate would approve only of the tax increases. The biden campaign proposed for markets oppenheimer. Strategist john. stolis said in a note monday. He believed democratic. Sweep in georgia could spark and as much as ten percent decline in the s. and p. Five hundred from year end closing prices.

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