U.S. equity markets are called higher this morning buoyed by increased demand for higher risk assets and underpinned by forecasts of a Republican victory in today’s elections.
With a Republican victory priced into the market, the size of the victory is most likely going to be the driving force today. Early in the session, gains may be limited but as exit poll results begin to come out, stocks may appreciate further.
How high the markets can rally is uncertain at this time because no one is sure how much the Fed is going to allocate to its new quantitative easing program. Guesses currently range from $250 billion to $1 trillion. The general thinking is, the higher the number, the stronger the rally.