Gadol, previous election showed how much in the stock market is driven by personalities of traders and their very human failures. 80/20 prediction was no excuse not to plan for the 20%. To answer your next question – stock market reaction after 2016 election that was later confirmed by economy for next several years seems like a pretty strong almost-controlled experiment in intervention. To analyze further, don’t look at currently floated explanations, but review history of predictions. Just from memory, economy and market consistently outperform predictions from experts both partisan (Prof. Krugman) and non-partisan after elections. Same thing post-covid. Would appreciate if someone with opposite bias goes thru the exercise of checking a time series of such predictions, I would not trust myself here. So, it is at least a reasonable hypothesis that Trump’s economic policies are beneficial for the country.
I agree that market seems to be ok with both candidates. It may be Biden’s reputation for centrism. I am not sure what we can use as a predictor of his policies. He has opinions expressed and sometimes updated over time, but no record of actions, whether positive or negative. Joe Liberman confirms that Biden is a true centrist, while liking Trump’s foreign policy… Robert Gates says Biden was consistently wrong on foreign policy, while not liking Trump’s. Go figure. I presume he’ll appoint centrists into key positions and make everyone come down. Chinese and Russians will not do anything drastic, but will continue pushing everywhere where we don’t stand up to them.
Another part of stock market calm may be that some of the positive changes introduced by Trump will be hard to reverse. Are we going back to see China again as benign partner? will we stop pressing Europeans from cooperation with Chinese (5G) and Russians (NordStream 2)? Stop fracking? Whenever Biden admitted to a policy, it was to continue Trump’s ones. I think taxes is where he claimed to want a lot, but many people are skeptical that he’ll be able to push that through.
You are inconsistent on SALT, I think: you reject Trump’s benefits for Israel, but you are OK with SALT for Jews in NY, even if SALT is a shameless give away both “to the rich” and to the state governments. I am sure it also discriminates against blacks, multi-gender, illegal immigrants, and whomever else Dems claim to support.