But just the opposite, I think: Wall Street’s confidence reflects a big bet on a brighter American future, certainly in the near to medium term. Disagree with that assessment if you want, but that’s how investors are seeing things. Here’s what JPMorgan told clients in its morning note, the day after the chaos on Capitol Hill: “Whether you think this is a ‘failed insurrection,’ ‘failed coup,’ ‘terrorism’ or ‘just a few bad apples’ there is no obvious policy or law enforcement response that impacts markets.”
All of which is correct. Congress still certified the electoral vote victory by Joe Biden and Kamala Harris. Martial law wasn’t declared in the wake of the attack. Markets opened as usual the next morning. Donald Trump will still leave office in less than two weeks. The system is working, even with an unhinged, authoritarian president sitting in the Oval Office.
And now it’s time to focus on an American economy that seems headed toward its strongest performance in perhaps four decades. Democratic victories in the two Georgia elections for the U.S. Senate have made Wall Street even more bullish about 2021. With Democrats taking unified control in Washington, investors are expecting more fiscal stimulus beyond the $900 billion plan passed in late December.