As Trump warns of economic disaster, Wall Street grows giddy about Biden

Traders in recent weeks have been piling into bets that a “blue wave” election, in which Democrats also seize the Senate, will produce an economy-juicing blast of fresh fiscal stimulus of $3 trillion or more that carries the U.S. past the coronavirus crisis and into a more normal environment for markets.

Far from panicking at the prospect of a Biden win, Wall Street CEOs, traders and investment managers now mostly say they would be fine with a change in the White House that reduces the Trump noise, lowers the threat of further trade wars and ensures a continuation of the government spending they’ve seen in recent years.

“The market is focusing on an end to the uncertainty around the Trump administration, and that in many respects is what underscores the pricing action around a possible Biden scenario and a blue wave,” said Joseph Brusuelas, chief economist at consulting firm RSM US. “Firms and investors crave stable expectations and that is how the Street is interpreting a likely Biden victory.”