Investors are warming to a 'blue wave' that could keep driving a stimulus-hungry market higher

U.S. Democratic presidential candidate Joe Biden speaks during a campaign event at United Association (UA) Plumbers Local 27 in Erie, PA, October 10, 2020.
Kevin Lamarque | Reuters

With just weeks to go until the election, the stock market appears to be switching horses.

That's not to say that Wall Street no longer perceives President Donald Trump as better for the economy, the market and taxes. But there's been a clear warming to the idea that former Vice President Joe Biden is getting far enough ahead of Trump in the polls that the threat of a contested election has been reduced, and Biden's policies could, in fact, be stimulative.

"The market is pricing in a Democratic wave. It's not scared," said Quincy Krosby, chief market strategist at Prudential Financial. "The market is accepting this in lieu of a contested election...The market, I think is beginning to understand a blue wave doesn't necessarily mean an ultra progressive agenda."

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