As voting began in the 2022 midterm elections, US markets rose as investors braced for outcomes that, should Republicans win seats in Congress, may result in political deadlock.
Because substantial policy changes would be less likely in the event of a Republican triumph, some say deadlock could be good for investors. If the results favor Republican candidates, it would increase market predictability and the S&P 500 may rise as high as 4,150 this week.
“[T]he Republicans have talked about freezing spending via the debt ceiling much like they did in 2011 (the Budget Control Act),” Morgan Stanley’s Mike Wilson wrote in a Monday note to clients. “This would be a sharp reversal from the past few years when budget deficits reached levels not seen since WWII. In our view, a clean sweep by the Republicans on Tuesday could greatly raise the odds of such an outcome.”
Original article posted here.