A trader smokes a cigarette in front of the New York Stock Exchange in the New York borough of Manhattan, two days after the 2020 US presidential election in New York, the United States, on November 5, 2020.
Carlo Allegri | Reuters
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For value investors who are waiting for a big rotation after the election, they might be disappointed again.
Many on Wall Street have been betting on a revival in value stocks with the belief that a potentially “blue wave” could help approve a massive budget spending package that will benefit cheap names whose recovery depends on broad economic turnaround.
However, the chances of a unified government have waned as both races of the Georgian Senate run into the January runoff. A split Congress could limit the new Biden administration’s ability to put in place large-scale fiscal stimulus, which could hurt value stocks’ chances of outperforming their growth counterparts, Wall Street strategists said.