Yesterday’s election results were largely in line with Wall Street consensus expectations. Most importantly, there were no big surprises. Accordingly, the market responded to the Democratic takeover of the House and the Republican gains in the Senate with 545-point surge in the Dow, one of the biggest one-day gains of 2018.
With the mid-terms now in the rear-view mirror, we expect President Trump to shift focus to his own re-election, which would make him more aggressive on pro-growth policies. Over the next two years, that means the White House will be loudly proclaiming the virtues of 3+ GDP growth and unemployment at all-time lows. Get ready for an onslaught of positive economic communications about how Trump is making America great again.
The topline takeaway from the election: Today’s public equities reaction is a sign of positive investor sentiment in days to follow. And, we believe this sentiment will positively impact private capital markets. In fact, we believe the healthy level of M&A and IPO activity we have seen in 2018 could continue well into 2019. With that as a backdrop, here are our thoughts on sectors and themes to watch over the next year.
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