End of the Beginning
With the final day of voting upon us, election forecasts and the betting markets lean towards a Democrat win.
However, the average of state polls indicate the race has continued to tighten, and four states (AZ, FL, NC & PA) will determine the outcome.
With AZ currently a toss-up and FL & NC tilted towards the Republicans, the Democrats must win PA to carry the Electoral College.
Given the tight margin, the DEMOCRATS ARE UNLIKELY TO GAIN CONTROL OF THE SENATE.
In terms of the markets, UNCERTAINTY IN DECLARING A WINNER WILL IMPACT ASSET PRICES. As such, the Federal Reserve is likely to ramp up interventions to shore up confidence.
The short-term impact will benefit investors, but the added risk of a Fed pullback
will make it harder to price assets over the long-term.