Will The November Elections Prompt A Giant "Sell The News" Slump?

We’ve already argued — with much pushback — that the GOP takeover of Congress will not initially be good for stocks.

The economy is addicted to stimulus, and gridlock will be painful.

But even if you don’t by that argument, you should at least be very worried about the extent to which so many investors think that divided government will be a great thing.

This isn’t just our sense from hearing people talk.

Here’s an interesting nugget form a new Bloomberg survey:

“Two-thirds of U.S. respondents say investing would be improved if Republicans won control of Congress in the November elections, according to the quarterly poll of investors and analysts who are Bloomberg subscribers conducted Sept. 16- 17.”

OK, but everyone expects the GOP to take over, right? And the market has this ability to look down the road, right? So it’s not like this would be even remotely unexpected at this point, right?

You’ve heard the line: Buy the rumour, sell the news. The buying has been happening hot and heavy lately.

Are we setting up for a huge sell-the-news selloff?

Now see: 13 signs that we’re in a depression >


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