After many weeks of telegraphing a long and careful ballot count, this week’s election lived up to that prediction in races for the Senate, the House, and the presidency. Locally, Democrat Mondaire Jones won (retiring) Nina Lowey's seat in Congress in District 17th which includes Rockland County and parts of Westchester County. Republican Rob Astorino is leading against incumbent NY State Senator (Democrat) Pete Harckman. The NY State Senator represents parts of Westchester County (Briarcliff Manor, Buchanan, Cortlandt, Corton-on-Hudson, Lewisboro, Mount Kisco, Mount Pleasant, New Castle, North Salem, Peekskill, Pleasantville- Astorino's hometown, Pound Ridge, Sleepy Hollow, Somers, and Yorktown), Putnam County (Brewster, Carmel, Patterson, and Southeast), and Dutchess (Beekman, Pawling) Counties. The Astorino victory would be a huge win for Rob and the Republican Party.
While Americans voted Tuesday, Wall Street cast its ballot Wednesday. While Democrats are the favorite to win the House and the Presidency, Republicans are leading the Senate. If Republicans keep the Senate, we are unlikely to see repeal of the Trump Tax Cuts for another two years. What does that mean for you as a Westchester County Resident? It means that SALT deduction caps of $10,000 are likely to remain in effect for the next two years, while corporate tax rates and personal income tax rates will hopefully remain at the current rates. Estate planning is still a consideration for Ultra High Net Worth Families with over $23,160,000 in assets. The Democrats will likely try to reduce the estate tax exemption if they get a hold of the Senate in two years. For families not in this category, the $15,000 annual gift exclusion should remain the same.
The S&P 500 rose 2.2% on Wednesday, November 4, as it appeared a divided government would be the outcome of election 2020. The Nasdaq, which has led all year, picked up 3.9%.1
While one might assume that having one party control the White House and both houses of Congress is the best situation for investors, in practice, this isn’t the case. Since 1937, the S&P index (in its various iterations) has shown a 14.6% return after elections, resulting in a divided government. This compares to a 13% return in election years where one party took the presidency, House, and Senate.2
Elections mean new leaders throughout the government and new policies that may be pursued. If you have concerns about these changes, we welcome the chance to hear your perspective and, hopefully, provide some guidance.
1. YahooFinance.com, November 4, 2020
2. Hartford Funds, “Election and Your Portfolio,” 2020
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite, LLC, is not affiliated with the named representative, broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.
Wall Street Reacts to Potentially Divided Government
November 06, 2020|