The stock market has enjoyed a historic rise, despite the pandemic and political upheaval, and looks poised to continue growing through 2021 and beyond.
(CBS Detroit) — The stock market continued its rise last week. Even Wednesday, the day rioters stormed the U.S. Capitol to stop the certifying of electoral college votes confirming Joe Biden’s election as President, the Dow Jones was up almost 500 points. It ended the week above 31,000 and close to its all-time high. The S&P 500 and NASDAQ also showed gains that day and for the week. Rising stock values in the face of government turmoil doesn’t make sense on its face. Investors value stability, and an angry mob interrupting the certification of a presidential election suggests the opposite. But maybe there’s more to the story. All three indices showed declines late in the day, when events at the Capitol were snowballing. But they gained ground early in the day, when the big news was still the Senate runoff elections in Georgia. Maybe this story had much more bearing on the future of the market and the economy in general. “The going up in the morning would be consistent with the results of the Georgia Senate election, which would indicate there’s more likely to be a larger stimulus bill coming soon for the economy, which the economy needs, and the stock market wants, and the vast majority of Americans want it and would benefit from it,” explains David Kass, clinical professor of finance at the Robert H. Smith School of Business at the University of Maryland. >>READ: Stimulus Check Latest: Have The Chances Of A $2,000 Payment Improved? On Tuesday, Democrats Jon Ossoff and Raphael Warnock won seats in the Senate, altering the political landscape for at least the next two years. The upper house is now split 50-50. (Democrats actually hold 48 seats, but independents Angus King of Maine and Bernie Sanders of Vermont tend to vote with them.) Vice President-elect Kamala Harris will cast the deciding vote for all ties, once she takes office. Party-line votes on hot-button issues seem likely, given the partisanship that still exists. With Biden’s inauguration on January 20, the Democrats will control the presidency and both houses of Congress. Their simple majority in the Senate won’t give them the 60 votes to overcome a filibuster without bipartisan support. And that makes broad legislation unlikely. But a simple majority does give the president-elect enough votes to hit the ground running when he enters office. Biden will be able to confirm his Cabinet nominees and pass legislation connected to budgets and spending through a legislative process known as reconciliation.
