- Investors surveyed by Goldman Sachs revealed they’re more concerned about the market impact of the Senate election outcome than the presidential results.
- Tony Pasquariello of Goldman Sachs Global Markets and Joe Wall of the Office of Government Affairs at Goldman detailed the results of this survey on the latest episode of t he Exchanges at Goldman Sachs Market Update podcast.
- “The headline of the survey was “it ain’t about the White House, it’s about the Senate,” Wall said.
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Investors surveyed by Goldman Sachs said that they’re more concerned about the market impact of the Senate outcome than the presidential election results. Tony Pasquariello, Goldman Sachs global head of hedge fund coverage for global markets, and Joe Wall, Goldman Sachs managing director in the Office of Government Affairs, detailed this survey during Friday’s episode of the Exchanges at Goldman Sachs Markets Update podcast.
The survey asked investors how they felt about the markets given various election outcome scenarios.
- With a Trump win and split Congress, meaning a Democratic-led House and Republican Senate, market participants think there’s a 40% chance markets will be either “somewhat stronger” or “much stronger.”
- With a Biden win and split Congress, 25% of participants said it will lead to a stronger market, while 49% said this will lead to a somewhat weaker or much weaker market.
- The next outcome given was a Biden win and a “small blue wave,” as Wall called it, where Democrats would narrowly win control of the Senate with around 50 or 51 seats. Fifty-eight per cent of market participants think that will lead to a weaker market and 23% say “much weaker.”
- The last scenario in the poll was a Biden win and what Wall deemed a “category 5 blue wave,” meaning Democrats win over 53 Senate seats. Thirty-six per cent of participants think this would lead to a “much weaker market.”
“The headline of the survey was ‘it ain’t about the White House, it’s about the Senate,’ and I think a lot of our clients are starting to think more and more closely about the Senate outcome,” Wall added. Pasquariello said that the election and how it relates to corporate taxation, regulation, and healthcare will become a larger area of focus for investors as November approaches.
Wall echoed previous Wall Street sentiment that Biden’s Kamala Harris vice presidential pick was not shocking to markets. “It seems market participants across the board, in a lot of ways, were not at all surprised by the pick. It wasn’t as if it was something out of left field,” Wall said.
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