- Wall Street may sell off stocks in November if Joe Biden gets elected as President.
- Wells Fargo executive Christopher Harvey said potential changes to the tax code remains a real threat to equities.
- The number of infections in the U.S. continues to increase, while the relationship with Germany worsens.
Wall Street is not fully pricing in the possibility of Joe Biden winning the U.S. presidential election. If Biden gets elected, a Wells Fargo exec warned stocks might see a sell-off.
Christopher Harvey, the head of equity strategy at Wells Fargo, told CNBC’s Trading Nation said:
We just don’t think it’s fully priced into the market place at this point. Biden is moving up in the polls. What does that mean for taxes? Can they [Democrats] win? Not just the White House, but can they win the Senate, as well?
A potential change in the tax code raises the probability of a stocks pullback in Q4 2020, Harvey warned.
What Does Wall Street See in Stocks in the Short-Term?
Strategists in Wall Street are concerned about two macro factors: the high unemployment rate and the second wave of infections.
The U.S. has been trying to reopen the economy since early June. But, the steep increase in virus cases led states to be cautious once again.
Consequently, 12 states have paused the reopening of the economy, citing higher infection rates and a resurgence in cases.
Houston Mayor Sylvester Turner said:
The community’s infection rate is three times higher today than it was three months ago.
Stocks are treading carefully in after-hours trading following a 2.84% drop on June 26. The Dow Jones Industrial Average (DJIA) slightly increased by 133 points in the futures market ahead of the market open.