BofA analysis predict Federal Reserve would support financial markets if presidential elections are contested, according to Reuters. Trump declined to commit to peaceful transfer of power if he loses on Nov. 3 and expect to contest loss in Supreme Court. Analysts believe the liquidity injections would favor tech with likelihood of Democratic sweep high. 

  • Strong inflows into tech stocks resumed after a correction occurred on the Nasdaq early September-BofA
  • Equity markets sentiments improved as BofA’s Bull and Bear indicator turned bullish
  • Largest inflow from Japan in 9 weeks, largest in 4 weeks in emerging markets, and the largest outflows from Europe in 13 weeks
  • $2.1 billion went into bonds, $0.3 billion into Gold, and $19.5 billion sucked out of cash

Stocks responding unfavorably to financial market uncertainty as risk free Treasury-linked bond gains. SPY premarket is down 1.31%,  QQQ premarket is down 1.89%. TLT is up 0.39% with volatility index VIX up 5%.