Good Tuesday AM,

Election day is finally here, not that we are guaranteed to have any answers today or even tomorrow on the Presidency, but as the day(s) progresses, we will get some direction. Markets are moving as they expect a blue wave (Democrats having a majority in both the House and the Senate as well as holding the White House). Last week markets seemed to be sitting on the sidelines coiled, this week so far, that coil is unwinding. Someone must have shouted fire and everyone followed into equities. The Dow is up 650 points today. Bonds are taking it on the chin with the 10-yr at .89%. We are sitting on a pivot point on the 10-yr. if we break .90, which seems likely at this point, we bring on 1.00 pretty quickly. Mortgage bonds are weak as well off 12bps. A blue wave, as markets think, would increase spending, which will be good for stocks. It will cause an uptick in inflation which is bad for bonds (pushes rates up to offset inflation). A question on a Democrat victory is how the pandemic will be handled. Will we shut much of the country down as Germany, France, The UK, etc. have done in the past two weeks? Hopefully there is some balance of power but in looking at the historical data from a purely financial lens, there really is not much difference in the returns/economic growth regardless of which party is in control. There is really no reason to worry about it now; it will be what it will be.

Please remain safe and healthy, make today great!