Fox Business Panel Agrees Senate Gridlock Great for Stocks: 'Nothing Gets Done'

A Fox Business Network panel was in agreement Monday that stocks will continue to rise as long as Republicans hold onto the Senate on Election Day, causing "gridlock" and blocking any legislation from passing.

Host Stuart Varney and longtime contributor and investment expert Dennis Gartman discussed reasons why the stock market is at "all-time highs" just weeks ahead of a potentially contentious presidential election. Varney said that stocks will stay strong regardless of whether President Donald Trump is re-elected or former Vice President Joe Biden takes office, because Trump will cut taxes and Biden will "spend big." But Varney and Gartman said the biggest concern politically would be a "Democrat blowout," where they take the White House and majorities in both chambers of Congress.

Gartman cautioned that while Republicans must maintain the senate majority in order to keep stocks high, maintaining the Federal Reserve Chairman, Jerome Powell, is likely the much more important factor. Gartman said he believes Biden is set to defeat Trump on November 3.

"It does look like the Republicans are going to be able to hold the Senate, the race that really is important is what's happening in North Carolina, where the Democratic candidate [Cal Cunningham] who was leading is probably now behind following a marital problem that he's had. That takes away one of the concerns that you [host Varney] explained, that there would be a tidal wave of Democrats," said Gartman, who is now chairman of the University of Akron Endowment Investment Committee.

"I don't think [the Democrats] are going to win the Senate, and as long as the Republicans continue to hold the Senate, that will give us gridlock and I'm always a great fan of gridlock because nothing really gets done," Gartman added.

"However, there will be passage of infrastructure spending and there will be much greater spending coming in the next year no matter who is the president. So right now, it's still a bull market," he continued.

Despite Gartman's view in the wake of Cunningham's text messaging scandal, the most recent Reuters/Ipsos poll still shows the Democratic challenger leading incumbent Republican senator Thom Tillis. Forty-seven percent of likely North Carolina voters said they plan to vote for Cunningham, while 42 percent support Tillis. The numbers have changed very little since Cunningham publicly apologized at the start of October.

Varney warned that if Democrats take control of the House, Senate and White House, that will signal "neo-Socialist America," which could tank stock values. Additionally, a contested or protracted election could create instability that would do the same.

Both Varney and Gartman noted that as long as the Federal Reserve keeps printing trillions of dollars "no matter what," then the economy and stocks can remain bullish, a sentiment Gartman said he's maintained in The Gartman Letter he publishes for stock market insiders and investors.

"I'm not as concerned about a shift politically, but it does appear Mr. Biden is going to win the presidency unless something untoward is to happen in his campaign and I wish otherwise but that seems to be the reality," Gartman said.

"If Trump wins the election, he'll cut taxes, good for stocks," Varney said. "If Biden wins, he'll spend big, good for stocks. The baseline for stock prices are forecast to improve."

The president himself has repeatedly touted stocks as a partisan sign that his presidency is doing well. Trump tweeted Monday, "STOCK MARKET UP ANOTHER 300 POINTS - GREATEST LEADING INDICATOR OF THEM ALL!!! DON'T RUIN IT WITH SLEEPY JOE!!!"

Newsweek reached out to both the Biden and Trump campaigns for additional remarks Monday afternoon but did not receive replies before publication.

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A Fox Business Network panel was in agreement Monday that stocks will continue to rise as long as Republicans hold onto the senate on Election Day, causing "gridlock" and blocking any legislation from passing. Screenshot: Fox Business Network | YouTube