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Tuesday, November 3, 2026 |
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The Last Page.
The last page, first.
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The Bond Market Gets the Last Vote
Democrats are heavy favorites to take both chambers of Congress tonight. Wall Street can’t agree whether that ends in a rally or in what one veteran calls a very cold shower.
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Gold hit a one-year low on Friday and bounced on Monday. Thinking about buying the dip? One trader’s view of where the big gold money is going:
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He’s not the only one, either.
This ad is sent on behalf of Traders Agency, LLC, at 20 N Orange Ave Suite 1100, Orlando, FL 32801.
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The story
Americans vote today, and the bettors have mostly made up their minds. On Polymarket, they put Democrats at about 73% to win both the House and the Senate. More than $52 million has been traded in that market.
Your money gets its answer at Wednesday’s opening bell. On Monday, with the vote a day away, the S&P 500 slipped 0.5% and the Nasdaq lost about 1%. Oil, meanwhile, fell about 8% on hopes for peace talks with Iran.
Wall Street and Main Street share one question this morning. What does a new Congress do to the money you already have?
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Before the results come in, a one-minute read for savers on getting ready for a new Congress:
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I don’t write about politics. Ever.
But I’m breaking my own rule today, because of what the midterm polls have been showing all summer.
Democrats have held the lead for months. The forecasters now favor the House of Representatives to flip in November. And lately, everyone I talk to is asking me some version of the same question:
My answer never changes.
The wrong time to protect your retirement is after the rules change. The right time is now, while everyone else is still arguing about the polls.
Whatever happens on Election Day, the people who prepared beforehand will sleep fine that night. The people who didn’t will be making phone calls in a panic, weeks too late.
I know which group I’d rather be in.
Sincerely,
Shanon Davis
P.S. There is one move Americans are quietly making before the midterms. If you only ever click one thing I send you, make it this one.
© American Alternative Assets. All rights reserved. This is an advertisement. 21550 W Oxnard St Ste 845, Woodland Hills, California 91367.
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Mike Wilson, Morgan Stanley’s top stock strategist, says stock prices already expect a Democratic House and a narrow Democratic Senate. He expects the S&P 500 to dip toward 7,100 as the vote and other worries clear, then run to 8,000.
Ed Yardeni, a Wall Street veteran of more than 40 years, sees the same result as “a very cold shower” for stocks. “Usually the market loves gridlock,” he said, “but in this situation we’re talking about much more partisanship.”
His worry is Washington’s checkbook. More partisanship means longer shutdowns and uglier fights over the debt. Then the buyers of Treasury bonds charge more to lend, and stocks pay for it.
In 1983 Yardeni coined a name for those angry bond buyers: bond vigilantes. They dump government bonds to protest heavy borrowing. The 10-year Treasury yield, which mortgage rates follow, closed near 4.9% on Monday, after sitting just under 5% a week ago.
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Whoever wins Congress tonight, one research director argues the bigger move for your money will come from the White House, and lays out how to prepare:
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As Commander in Chief, Donald Trump made some of the most shocking military moves within the first six months of his second term.
But I believe his most controversial, and consequential, act won’t be a military maneuver.
I’ve been tracking this situation since before his first term.
It’s a crisis that’s been decades in the making.
And I believe Trump has an extreme plan up his sleeve to defuse this “financial nuke” before it vaporizes America from within.
I’m calling it America’s D-Day, because if Trump executes this plan, it will be a day that lives in infamy. |
But if you understand what’s happening and how to prepare, it could open one of the greatest opportunities in a generation.
Regards,
Ross Givens
Director of Research, Traders Agency
This ad is sent on behalf of Traders Agency, LLC, at 20 N Orange Ave Suite 1100, Orlando, FL 32801.
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So tonight’s vote gets counted twice, once by the networks and once by the bond market. We ran both counts forward.
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If bond buyers stay calm
Our best-case projection: February 2027
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If bond buyers revolt
Our worst-case projection: April 2027
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Best case
FEBRUARY 2027. Democrats took both chambers, as the odds said they would, and the dip came on schedule. The S&P 500 slid toward Wilson’s 7,100 in November, then turned. By February it is climbing toward his 8,000.
Washington spent the winter shouting at itself and passing very little. Gridlock, as advertised. With no big tax or spending laws moving, bond buyers had nothing new to charge for.
The 10-year drifted lower, and the mortgage quotes in your mailbox finally got smaller.
Your 401(k) statement made back the fall and then some. Yardeni’s cold shower turned out to be a short one. He had written in late October that dips after the vote could be buying chances.
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Worst case
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APRIL 2027. The sweep came in bigger than the bettors expected. The old Congress pushed the Dec. 11 funding deadline into January.
Within a month, the new Congress and the White House were at war over it. First the shutdown. Then the debt fight.
Bond buyers did what Yardeni said they would. The 10-year went back over 5% the week after the vote and later passed October’s 5.36% high. Every mortgage quote in America moved with it.
Stocks took the cold shower. The S&P 500 fell through Wilson’s 7,100 and kept going. The same tech giants that fill your index fund led it down.
Your 401(k) statement shows a loss your adviser calls temporary. The cash fund paying you close to 4% is the only line on it that went up.
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Either ending runs through the same few stocks in your index fund. For anyone who wants part of a retirement outside them, a guide on moving it into physical gold:
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Goldman Sachs revealed that the top 10 stocks in the S&P 500 now control 41% of the entire index.
This is an advertisement.
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How it ends
You get Wilson’s dip and rebound unless Washington’s fights push the 10-year Treasury yield back above 5%.
The vote itself is mostly in the price. Bettors have leaned toward Democrats for weeks, and Wilson says a Democratic House and a narrow Senate are already expected. Markets move on surprises, and a sweep that matches the odds would be no surprise. A split Congress would be the surprise, and the kind of gridlock Yardeni says markets usually like.
The danger runs through the bond market instead. Yields rose this year mostly on strong growth, Wilson argues, though he admits that view is not the consensus. Yields pushed up by Washington’s fights are worse, because they arrive with no extra profits attached.
Presidents have learned this before. In 1993 James Carville, then advising President Clinton, said he wanted to come back in his next life as the bond market. “You can intimidate everybody,” he explained.
For you, the two endings land on different lines of the same statement. Under 5%, your stock funds do the lifting. Above 5%, your cash fund earns more, while your stocks and refinance plans take the hit.
Voters pick the Congress tonight. By Friday’s close, the bond market will have cast its own vote.
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The 10-year Treasury yield at Friday’s close, after the October jobs report. It ended Monday near 4.9%. A close above 5% on a soft jobs number means bond buyers are charging Washington, and the worst case has started.
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