The Stock Market could get DESTROYED in 7 Days.

what could the elections do to the stock

market well in this video we're going to

review exactly that this video is

brought to you by Mumu but more on them

later okay let's get right into it here

it is so first predicted which is a

vetting website for making bets on

outcomes for certain events like

elections by the way I've had the CEO on

the channel phenomenal company not

sponsored by them but we'll say great

company really really enjoyed their

presence they're suggesting that the

odds of Senate party control have

actually been skyrocketing here uh to

the to the highest levels that we've

basically seen since the summer uh right

here in October of 2022 so we're just

now within a week of the election and uh

we have almost certain

Republican control of the Senate over 70

percent according to predictive and when

we look at house control we've actually

got house Republican Patrol uh troll as

high as 90 percent according to

predicted now that's not necessarily uh

the the the best way to predict outcomes

but I like looking at uh polling uh

products where people are putting their

money on the outcome I believe they have

a better outcome than just the random

polls that polling places do I mean who

remembers 538 okay need to say no more

anyway if we have Republican control of

just one of them

the policy implications are probably

going to be quite simply put a

legislative standstill

in either chamber you get a legislative

standstill across the board because

remember in order for legislation to get

passed it must go through the house it

must go through the Senate and it must

be signed by the president which means

Republicans aren't going to get anything

through unless the president is on board

because well the president has to sign

it or the president can veto it and

there's not enough control for any kind

of congressional super majority

uh the courts can operate as they are

now they're ruling on Trump's tax

returns and affirmative action but

they're not going to legislate uh

although they may bench legislate with

with some of the things that we've even

seen in the last uh you know six months

here but more importantly nothing

happens in Congress and there's

something interesting that happens when

nothing happens in Congress uh in after

elections

when it comes to the stock market

first is what happens after elections in

general and then what happens when

Republicans take over we've got data on

both of these all right first take a

look at this since 1960 this has been

the s p 500's performance after

elections okay notice how none of

the years after an election this is 360

days right here so none of the years

after an election have we actually seen

negative Returns on the average

again this is an average so that's not

to say that there isn't a year it's just

on average you don't see it whether it

is a midterm election a presidential

election uh or the average of of all

elections you consistently see positive

returns again no guarantees we could see

a negative

because this is just the average but

look at how much your margin of safety

is that we're likely to see a positive

next year in the s p 500.

after uh 60 days almost in all cases you

were up about five percent on the s p

500. and then your range of outcomes was

anywhere between seven and a half to

almost 10 percent here on average to 15

to about 22 percent

so anywhere really between seven and a

half to 22 potential average returns

following elections

okay that's pretty bullish that's a

reason to actually be optimistic

uh and and then you see this is

volatility following elections I I would

say that if we were to draw a you know

sort of a

an average or like a a median here it's

very difficult to do so if I just look

at the Gray Line I'd say the median vix

would be somewhere around 20. yeah which

is an absolutely terrible right the vix

is sort of your your fear index we're

sitting at 25 right now so look at where

we're sitting right now right now we're

at the green line you know let me draw

these lines straight so it's a little

easier there we go perfect so right now

we're at the green line I'd say the

average over here in this gray area

would be this red line probably also in

that actually probably your overall

average is somewhere around uh closer to

19 to 20. so that's good we expect

volatility to come down somewhere around

25 on average and on average the s p

returns over the next year somewhere

between five to twenty three percent now

how about specific instances like is

there a difference between when

Republicans take over versus when

Democrats take over

yes there is and I'm going to reveal

that based on citibank's Research right

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I have chart here

Republicans controlled the Senate

or the house we generally ended the year

with a positive

1.4 percent or positive 3.5 percent

roughly similar to the Democratic Senate

although that was a little higher and

Democratic house over here these are

kind of nominal bumps right here by the

end of the year so you're not expecting

an immediate rally but look at the next

year I don't really care if you're a

Democrat or Republican these numbers are

great your average return was between

17.7 percent all the way up to 23.8

percent

no matter what happened now if you got a

Republican president you actually had a

slower end of the year but you had a

bigger on average s p move thereafter

if you had all Republican control you

tended to have nearly a 30 percent

one-year return incredible that's a

substantially more than the Democrat

control here although that would be in

the one year out time frame now but what

we're looking for is the Senate changing

from D to R look at this okay Senate

change from Democrat to Republican

almost no move on average by the end of

the year

but about a 19.5 average s p return

after a year that means if you have a a

stock that's trading at a two times beta

like a Tesla you could see a 40 average

return in a year no guarantees obviously

you know pick a single stock Anything

Could Happen uh but that's incredible

now house change from D to R

also

19.9 within a year

notice one thing nothing on the right

side is negative and almost nothing is

negative on the left side the left side

again is till year end see that right

here year end and then this is the year

after

all right what if you have gridlock

versus a split House and Senate oh look

doesn't even matter gridlock was great

with an average return of 19 percent

this is really exciting like these both

of these charts create bullishness now

if you want to look at segments

individually I'm not going to break

these down but you can you could just

take a screenshot of that that's fine

with me but let's look at some of the

the sort of the bottom line that City

provides here

our underlying view is that the election

effects will be secondary to the focus

on Fed rate policy inflation and

recession risk darn they have to buzz

kill yes yes they do so I just want to

be very clear

uh even though I know probably you know

40 percent of people have already

dropped off of the video that's their

problem for not sticking around uh I I

can't help it when people leave videos

and miss good information but as bullish

as this information seems

we're still subject to what the freaking

fed is up to and unfortunately that

sucks because the fed's up to nothing

great for stocks right now it's all

about squeezing the market down

and inflation has been relatively sticky

unless of course you subtract shelter

inflation which helps get our uh core

inflation to zero which is phenomenal

but

you know unfortunately that's just not

the way the FED looks at it if they

shifted and started looking at it that

way oh that would look good anyway we'll

see

uh additionally

Citibank goes on to say here that media

and entertainment semiconductors and

materials are signaling more fundamental

confidence under GOP control while

energy and materials have outperformed

alongside Democratic control Okay so

you're not really going to have control

either it's gonna be split right so I'm

not too sure this this matters much

since we're probably going to go to some

sort of a form of a split here

and the average return for the S P 500

in the year following the midterm

election is 20 plus percent strong

returns are evident regardless of party

control we saw that and they view this

as basically a positive tail risk rather

than a core input for next year mostly

because

got the FED you're dealing with the FED

you're dealing with Russia uh in Ukraine

uh you're dealing with a lot of

disasters right an ongoing environmental

Focus has uh evolved and remained front

and center the Russia Ukraine disaster

is evolving you've still got the covet

Zero Nightmare in China although you did

have some bullishness that you know some

unconfirmed rumored reports that hey

maybe China's creating a committee to

get out of their covet zero process but

um I'd say overall interesting research

certainly a reason to be bullish for the

next year and I'm excited about that

thanks for watching and folks we'll see

in the next one bye