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Michael Traxler Wealth Management, LLC

Does Wallstreet like Gridlock?

It’s time for a big sigh of relief right?  The election is over, and the nasty annoying political ads can finally stop. Amen to that!

So what happened?  Not as much as the talking heads anticipated that’s for sure. It sounds like the house will go to the republicans in a simple majority, and the outcome in the senate is still not know.  Last time I looked it was 48 to 48 in the senate with 4 races still outstanding, and sounds like we won’t hear the final outcome for a few days yet.  In the end, it does suggest some sort of gridlock in Washington. We’ll just have to wait and see.

So, does the stock market like gridlock? Well, on average stocks are weak during year two and strong during year three post the mid-term election.  We shall see if that holds true in 2023 which is year three in this case. Take a look at the chart below. The period of time that is typically down has a box around it, that is past us now as we are getting closer to entering year three.  Remember, these are just averages and do not promise any sort of outcome. Yet historically, year 3 is positive some 80% of the time. Let’s see what happens, and in the mean time prepare for the Thanksgiving Holiday!

Best Regards,