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The biggest election takeaway is the 'absolutely massive failure of polling': Tom Lee

Ines Ferré
·Markets Reporter
·2 min read

If there’s a clear takeaway from last night’s election, it’s that the polls got it wrong — again.

“To me, the biggest takeaway is the massive, absolutely massive failure of polling,” says Fundstrat Global Advisors managing partner Tom Lee.

“This is a big money business and is used to influence behavior and financial markets. And these polls have been dead wrong again — an indictment of polling,” wrote Lee in a note to investors.

The prospects of a blue wave have fizzled as Democrats failed to pick up as many Senate seats as they’d hoped for. A divided Congress has driven pharmaceuticals, communications services and tech stocks higher as the Nasdaq (^IXIC) gained 4% during todays session and the Dow (^DJI) shot up up more than 600 points. Even energy stocks are higher on the prospects of less regulations and legislation out of D.C.

President Donald Trump supporter Loretta Oakes reacts while watching returns in favor of Democratic presidential candidate former Vice President Joe Biden, at a Republican election-night watch party, Tuesday, Nov. 3, 2020, in Las Vegas. (AP Photo/John Locher)
President Donald Trump supporter Loretta Oakes reacts while watching returns in favor of Democratic presidential candidate former Vice President Joe Biden, at a Republican election-night watch party, Tuesday, Nov. 3, 2020, in Las Vegas. (AP Photo/John Locher)

Lee also points out the recent sell-off in the markets leading up to election week.

“The Nasdaq got obliterated because of the fears of a capital gains tax increase. So that's kind of off the table with the Senate staying Republican,” said Lee

He highlights a balanced Congress may ultimately mean a higher probability of a stimulus bill.

“Under this scenario with Republicans controlling Senate, I think the chances of stimulus before year-end have actually gone up, because you're not having a lame duck session where all three chambers are changing,” Lee told Yahoo Finance Live.

“At the end of the day, the market doesn't need a massive stimulus bill. It actually needs to put a lifeline to those millions of Americans that are suffering,” he added.

As for the presidency, two sectors which Lee says are most closely tied to a Trump re-election are real estate and energy which “are posting tripped rallies.” That leads him to believe the markets may be indicating a Biden win is likely.

Ines covers the U.S. stock market. Follow her on Twitter at @ines_ferre

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