The stock market saw an initial upswing even with the presidential race undecided and possibly headed to the courts, but Friday futures show the market may be coming back down to earth.
Financial analysts and market watchers say the market may be more impacted by who controls the Senate.
“The concern was, would there be higher taxes? Would there be higher regulations and that appears to not be in the near future. That is driving stock prices higher,” financial analyst Derrick Kinney said. “However if we see the election prolonged, as we see things work through the court system, if there is more uncertainty injected into what the market wants as certainty, we’re likely to see more volatility.”
Kinney said the market likes certainty and clarity and there is a bit of uncertainty in the country.
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“One thing we don’t know is what the next 30 to 60 days will look like – the impact of the pandemic, will there be another fiscal stimulus package? Will consumers be employed or will the unemployment rates go higher? All of those could have a negative impact on the market and make things much more volatile,” Kinney said.
When it comes to investing, Kinney thinks the large blue chip companies will do better.
“If the pandemic ramps up, we may see more stay at home orders, which means more delivery services. Think Amazon. Think Netflix,” Kinney said. “Think those types of services that likely may perform well in this environment, but also realize volatility is here to stay until we know what the next couple of months look like; even what the next 24 hours look like. We are likely to see more volatility in the market.”