While political watchers are busy prognosticating who will win the White House Tuesday, advisors, too, are bracing for a new president and a new Congress.
Two developments over the weekend show Vice President Kamala Harris is headed toward a "very narrow" victory in the presidential election, according to Greg Valliere, chief U.S. policy strategist at AGF Investments. However, "several recounts are certain," Valliere opined.
"Stunning polls" showed former President Donald Trump "may be in trouble — is he really trailing by 3 points in Iowa? And is Trump really ahead in Florida by just five points?" Valliere asked in his Monday newsletter.
Harris, according to Valliere, has "the slightly easier path to winning 270 votes."
Last minute polls, Valliere wrote, "can be erratic, but there's a sense among political strategists that Trump is losing support in the Midwest; if Iowa is this close, could he be fading in Wisconsin or Michigan?"
Meanwhile, is "winning Wisconsin and Michigan" enough for Harris? Valliere said. "Pennsylvania is the big prize, and Trump seems virtually tied there."
There's also growing dissent in the Trump camp, according to Valliere. "Several of his long-time staffers are in near-revolt, angry that Trump will not take direction and is unwilling to stick to campaign issues in his rambling rallies."
Advisor Concerns
Michael Lofley, advisor with HBKS Wealth Advisors in Stuart, Florida, said he's most concerned with clients "panicking and overreacting to the results — in either direction. Things are volatile and emotions are running high, which can lead to bad decisions."
Depending on which party ends up controlling the Senate and House, "there could be massive repercussions for markets, inflation, energy policy, immigration policies, the deficit, and tax policy," said David Flores Wilson, managing partner at Sincerus Advisory in New York.
"In general, we would be concerned from a markets perspective if one party won control over the White House and the legislative branch, since markets have performed worse historically under one-party rule," Flores said.
A Trump win "combined with Republicans flipping the Senate and holding onto the House, could be inflationary due to large tariff hikes on imports and mass deportations of low-cost labor," Flores said.