'Blue wave' of course refers to a Biden win and the Senate changing hands.
Our market views remain broadly procyclical, consistent with our above-consensus global growth forecast. While a blue wave would have mixed implications for broad US equity indices
GS see a negative in the form of:
- a sizable increase in the corporate income tax rate by up to 7 percentage points
But positives as:
- would likely result in substantially easier US fiscal policy
- a reduced risk of renewed trade escalation
- and a firmer global growth outlook
More:
- These shifts should be clearly positive for cyclical sectors, as well as firms that pay most of their taxes outside the United States. In addition, we would expect a material backup in longer-term sovereign bond yields as well as support for our standing forecasts of higher commodity prices and a weaker US dollar.
(bolding mine).
