Wall Street liked what happened on Tuesday's election and found that democrats who are now controlling the house can keep Donald Trumps more destructive tendencies – on things that trade for one – at bay.
Wall Street does not know Trump.
Dow Jones Industrial Average increased 545 points on Wednesday, to close 26,180. And Tuesday's future markets moved even more dramatically as the election results came in.
It seems as if someone had put a yo-yo into trading people.
Wall Street comes in front of itself. If traders expect calm after the storm, they will end up being capsized.
For one thing, Trump will not let a small thing like defeat in a choice hold him back. This guy has been through embarrassing divorces, corporate bankruptcies, scandals and several scandals, and has always come out and look at the bright side of things.
The bright side he wants to see in this election?
For one thing, Trump received a greater majority in the Senate. And cabinet agreements, appropriation bills and ̵
It is also this point that will reassure every part of Trump's ego that may have been hurt: Democrats under President Obama lost 63 seats in the mid-term election in 2010.
Trump's Republicans lost only 34 seats. "What a victory!" Trump must think. (In truth, the Democrats were probably disappointed that they did not come anywhere near the so-called "blue wave" victory they hoped for.)
So if the Chinese think they will see the softer side of Trump now that the policy is over, they will also get very disappointed
Here's what the Congress's gridlock, with Republicans who control the Senate and Democrats, will mean to you, according to Goldman Sachs.
- No major changes in taxes (which means that federal debt will be worse).
- Government spending will remain at today's level (which means that federal debt will be worse).
- No agreement on infrastructure (which will help the deficit and not Material to any bridge will come down.)
- Health care will be a major issue that may – maybe – the two parties can agree (but do not trust on that).
- No changes to the regulations because the House can pass bills, but the Senate will reject them.
- Federal time limits for consumption will be more difficult as brinkmanship abounds. The next deadline is 7 December.
Do you notice how this choice had so much to do with money issues? Politics reflects life.
The great dynamism of this choice was the economy.
If there are jobs and voters are happy, you only lose 34 seats in the house and not 63. But here's the difficult part for the president in 2020. (Yes, it's time to talk about the next election.)  Most administrations like to make the economy slow and speed up just in time for the next presidential election.
Trump's impatience by being elected in 2016 may have put the administration's financial performance out of good politics.
President George HW Bush lost Bill Clinton in 1992 because Bush's economy did not feel it grew in the evening of his re-election vote.
Trump may be out of order and the economy may decline when re-elected.
Which stocks will directly benefit from the election results?
If Dems and Reps can come together on an infrastructure plan (not likely), industry and material stocks will benefit. Drug stocks will be damaged if the two sides begin to collaborate on price reductions on medicines. Not likely.
And if Trump's trade policy, like many, including me, believes is dangerous aggressive, is limited (not likely), companies such as Caterpillar, Boeing, Apple and any other outfit that do business abroad may be of use.
If I'm feeling negative, it's because of all the negative will. But if the democrats play their cards correctly, they can actually get something out of Trump that will help them in the next presidential election.
During his life, Trump has not been locked into any particular political philosophy. He bends.
And it's time for some bends of both sides in Washington.