US BOURSE NO LONGER CARES WHETHER TRUMP WINS OR IS KICKED OUT

Stocks have been on an amazing ride over the past few months despite a torrent of bad news about the global economy and the optimism on Wall Street comes as polls show presumptive Democratic nominee Joe Biden has a growing head-to-head national lead over President Donald Trump, Paul R. La Monica wrote for CNN Business last week.

“It's a bit curious. The conventional wisdom on Wall Street is that the market likes when a Republican is in power. And Trump has enacted several investor-friendly policies, such as tax cuts and the rolling back of some federal regulations on health care and the banking sectors,” La Monica noted. The market had been moving practically in lockstep with the general election polls — until recently.

“That relationship has broken down a bit in early June, with Trump's chances (according to the betting markets) falling and the S&P 500 surging," wrote RBC strategist Lori Calvasina in a report Monday. Even though Biden is leading in many polls, the Nasdaq hit an all-time high above 10,000 Tuesday and the S&P 500's relentless rally since March pushed it back into positive territory for the year on Monday for the first time since February. The recent market rebound should be a good sign for Trump's reelection chances. But Calvasina pointed out that "the stock market has decoupled from Trump."

The stock market is not the economy. Investors are bullish even as millions of Americans have lost their jobs as a result of Covid-19 related shutdowns. That fact could hurt Trump, as could the growing level of racial and social unrest in the country -- something that investors have largely ignored but that voters may not.

Nonetheless, the fact that Trump is lagging Biden even as stocks' rally is noteworthy. The stock market did quite well when Democrats Bill Clinton and Barack Obama were in the White House. So the notion that Wall Street can't thrive with a Democratic president is flat out wrong.