This is not financial advice. CTH simply explains economic influences and how they show up visibly in various KPI’s.  This is not financial advice.
The current Wall Street stock market sell-off is (in majority) mostly an outcome of investors betting Republicans are going to lose the House of Representatives and the MAGA economic policy will be blocked by a Democrat controlled House.

The U.S. Stock Market is factoring in a House of Representatives election loss for the Trump economic agenda.  Predictably, Democrats will target the administration with legislative challenges, investigations and court cases focused on regulations and tax policy.
Democrats have announced their intent to target President Trump cabinet members for investigations; the administration will be bound up in committee oversight; Trump’s family business interests and taxes will be part of a renewed investigation; and all of the MAGAnomic policy will immediately stop amid the reistance.  That’s the reality.
From the perspective of 5-year-view investors: If you think the 2018 mid-term election will result in a Democrat controlled house of representatives; with Adam Schiff as Speaker; then getting out of the market is not an unreasonable position.

However, for those who estimate the 2018 mid-term election will result in Republicans retaining control of the house of representatives; with either Kevin McCarthy or Jim Jordan as speaker; then now through election day is the time to buy-in to the market.
If the GOP keep the house, all current year stock sell-offs (drops) will be made up on November 7th, 2018 (likely within 48 hours) as they were in the aftermath of the 2016 presidential election.
Obviously there are other factors…. Obviously, this big picture aspect is simplistic; but the 2018 midterm election result is the largest current dynamic influencing market fluctuations.  There are billions at stake.
Those who think Democrats will win are selling (Wall Street). Those who think the GOP will win, and retain the house, are buying/holding (Main Street).
It is a weird, yet simple, year.

 

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