What's Next for Stimulus, Markets as Election Remains Undecided

A GOP Senate would likely "reject a massive Biden stimulus plan that the financial markets are hoping for," Valliere continued, with Trump being able to "get a bigger package than Biden's through Congress."

Trump "would spend lavishly next year," Valliere added, "boosting an economy that should be shaking off the pandemic by spring."

Market Outlook

Columbia Threadneedle Investments said in Wednesday blog post that investors should "stay focused on long-term goals and avoid emotional decisions."

In the long run, Columbia Threadneedle said, "changes in presidential administrations rarely lead to material fundamental changes in how the U.S. economy works, especially if Congress is divided. Consequently, the basic economic tenets that the financial markets rely on are unlikely to change, so staying focused on long-term goals remains the best course of action."

Markets, meanwhile, "are reacting very positively to the fact that a great deal of the election uncertainty has passed. Not all of it, but at least the worst outcomes seem to have been avoided," Brad McMillan, chief investment officer at Commonwealth Financial Network, noted in an email Wednesday.

"With no blue wave, we are likely to see the Senate remain very closely divided, which will constrain the policy options of whoever wins the presidency," McMillan wrote. "That probably rules out any substantial activity on taxes, as well as limiting any actions to control the major tech firms. On the positive side, once the election is resolved, the political order will be set, and items such as fiscal stimulus can be negotiated. Again, the story here is that uncertainty is down significantly and will drop further once we get the final figures."

Health Care Outlook

Split control of Congress — with the Senate maintaining GOP control and the House ruled by the Democrats — "would likely result in a business as usual regulatory environment for the healthcare industry," according to a Morningstar stock analysis released Wednesday morning.

"However, we think executive orders could create mildly positive effects on the number of insured Americans with a Democrat in the White House and mildly negative effects with Republican control."

The U.S., Morningstar wrote, "still remains in increasing access mode, and current initiatives to expand the insured population create a spectrum of risks and opportunities, with the public option representing the major wildcard."

Based on Morningstar's pricing estimates for the public option, "we see the potential for major changes on the individual exchanges but only minor changes in the important employer-based market even at the low end of our estimated pricing range."

The role of private insurers in the public option "could also be a point of compromise in the legislative process since plans from private insurers, like Medicare Advantage, could play a role," Morningstar said.

— Related on ThinkAdvisor:

• Gundlach: Huge Political, Economic Shakeup Is Coming
• Here Are Trump's Tax Priorities if Reelected: Sen. Portman
• GMO's Grantham: We Need a New Marshall Plan