After Some Post-Election Price Action, Market To Refocus On Economy And Earnings

Stocks closed higher yesterday as the market awaits the results of the midterm elections.

I'm writing this before the results have been called.

But as I said yesterday, the market is likely to breathe a sigh of relief, assuming there are no dramatic surprises that are wildly outside of current expectations (i.e., the House may or may not flip, but the Senate stays the same).

However, if both chambers flip, or no chambers flip, those are two results that would catch the market off guard. And that could easily result in a 'surprise' up or down move.

But again, if the final tally falls within the range of the varied expectations, the market is likely to soon get back to its winning ways.

That's because the market hates uncertainty. And that will now be over. The political lay of the land will be known. And the market can get back to focusing on the record economy and surging corporate profits. And that should translate to more gains for stocks.

November and December are historically strong months for the market. Especially after midterms.

So I'm glad this election is finally over because I think the market has a lot of catching up to do on the upside.

See you tomorrow,

Kevin Matras

Executive Vice President, Zacks Investment Research

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