Why 2016 tells us the election’s ‘biggest surprise’ will bring a great 2021 for investors, strategist says

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The election's biggest surprise, near-term market weakness, will bring a “high quality buying opportunity” setting up for a positive 2021, strategists say.

Apple AAPL, +1.27%, Google parent Alphabet GOOG, -0.33%, Facebook FB, +0.02%, and Amazon AMZN, +2.09% will all report earnings on Thursday, while Microsoft MSFT, -0.02% reports on Tuesday.

Of course, next week’s election, and the uncertainty that brings, is also at the forefront of investors’ minds. The pair looked to 2016 and the stock market reaction to the “all-time surprise” of President Donald Trump’s win for lessons heading into the 2020 vote, in a note on Sunday. Financials, energy and technology led throughout 2016, with health care underperforming, they noted.

The market was likely to drift lower in the near term, with no stimulus bill being likely until after Inauguration Day in January, COVID-19’s resurgence and election uncertainty, they said, and recent tactical weakness in tech and consumer discretionary may continue as investors look to sell winners.

The buzz Fast food restaurant company Dunkin’ Brands Group DNKN, +15.97% is in talks to go private in a sale to private equity-backed Inspire Brands, the New York Times reported on Sunday. German pharmaceutical and chemicals giant Bayer BAYN, +1.74% said it would pay up to $4 billion for U.S. biotech firm Asklepios BioPharmaceutical to strengthen its drug making arm.

 

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