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Election Day 2020

Election Day is a mere three weeks away and the parlor games of predicting election winners and market impacts is in full swing. As of today, the consensus appears to be that Democrats will retain control of the House, while it appears increasingly likely that the Republican-controlled Senate will flip (although this is FAR from certain). Polling for the presidential race indicates Democrats will likely take the White House too, although anything can happen in the next three weeks. 

The House is heavily favored to remain in Democratic hands.

The Senate is now slightly favored to flip from Republicans to Democrats.

Biden leads Trump by 10 points nationally, a seemingly decisive lead. However, there are three weeks left.

For comparison purposes, in 2016, Clinton never led Trump by much more than most polls' margins of error.

One question that we have been hearing quite a bit is, "What will the market impact from the presidential election be?" Historically, the answer depends on the timeframe considered as well as which party controls Congress.  No matter how we slice and dice the data, the one constant is that the stock market tends to do well no matter who is elected president. See here for a visual of  this data: Election Impact on Markets.pdf. Of course, the implication is that investing decisions should be driven by factors which are much more material than who is president.