Behind the video
How the Election will Damage Stocks: Prepare.
Overall Thesis
Kevin frames the two days before the midterms around Iran negotiation progress, betting-market odds for House/Senate control, and historical post-midterm S&P 500 seasonality, arguing a Democratic sweep could actually be easier for Trump to negotiate with than a split Congress. He does not stake out a specific price call on any stock, focusing instead on macro/political probabilities.
Narratives
Kevin cites JPMorgan data showing the S&P 500 has been higher 100% of the time in the six months following every midterm since 1950, averaging a 13.8% gain, alongside Bank of America data showing private-client equity allocations near multi-year highs and cash near multi-year lows. He presents this as context on positioning and seasonality rather than as his own explicit forecast for this cycle, repeatedly hedging that past results don't guarantee future results.
Key Arguments
- JPMorgan data: S&P 500 has been higher in the 6 months after every midterm since 1950, with a 100% hit rate and 13.8% average return
- Bank of America private-client equity allocation as % of AUM is at its highest since the bull run that ended November 2021, with cash at multi-year lows
- Northern Trust expects limited economic impact from midterms given fiscal policy is already largely set in law
- A government shutdown is likely in the first half of 2027 given the debt ceiling has only ~$900B of remaining room
- A split Republican/Democrat Congress with Trump could create more gridlock than a Democratic sweep, which Kevin argues could ironically be easier for Trump to negotiate with as a two-party rather than three-party negotiation
Risks acknowledged
- Past performance doesn't guarantee future results
- Government shutdown and gridlock risk remains elevated into 2027 regardless of outcome
- High oil and gas prices through the holidays are expected if the Iran conflict escalates as Rabobank's base case suggests
Hedges & Caveats
- Past performance doesn't guarantee future results
- Odds on an Iran deal and election outcomes are shifting daily and could change by the time of publication
- Not personalized financial advice
- Kalshi contracts are speculative event contracts, not an investment recommendation