Goldman Sachs scenario on a 'blue wave' election win - mixed implications for equities

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‘Blue wave’ of course refers to a Biden win and the Senate changing hands.

Our market views remain broadly procyclical, consistent with our above-consensus global growth forecast. While a blue wave would have mixed implications for broad US equity indices

GS see a negative in the form of:

a sizable increase in the corporate income tax rate by up to 7 percentage points

But positives as:

would likely result in substantially easier US fiscal policy
a reduced risk of renewed trade escalation
and a firmer global growth outlook

These shifts should be clearly positive for cyclical sectors, as well as firms that pay most of their taxes outside the United States. In addition, we would expect a material backup in longer-term sovereign bond yields as well as support for our standing forecasts of higher commodity prices and a weaker US dollar.

(bolding mine).

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