With Democrats in control of the House of Representatives for the first time in eight years and the Senate more solidly Republican, the U.S. economy is likely to continue on cruise control, analysts said, though market volatility could also remain the order of the day.
U.S. markets moved higher in trading after the election with major equity indices up across the board. The S&P 500 Index opened up 0.68% to 2774.13 and the Nasdaq Composite Index gained 2.55% to 7446.09 at the open. Yields on 10-year Treasurys moved down to 3.197% by 9:30 a.m. in New York.
"Our view leading up to the election was that, regardless of the outcome, there would be limited effect on the overall trajectory of the U.S. economy," said Mike Stritch, chief investment officer for BMO Wealth Management U.S. on a Nov. 7 conference call.
With unemployment historically low and wage growth numbers up 3.1% year-over-year for the first time since 2009, all indications are that the country's economy is still strong, Stritch said, leading BMO to recommend that asset managers remain moderately overweight with risk assets, including U.S. large-cap equities.