Welcome to Thoughts on the market. I'm Michael Zezes, head of Public Policy Research and Municipal Strategy for Morgan Stanley.

Along with my colleagues bringing you a variety of perspectives, I'll be talking about the intersection between U.S. public policy and

financial markets. It's Wednesday, November 4th at 8 p.m. in New York. In the U.S. election,

they're still counting votes, consistent with our view that election day would turn into election week.

Amidst the uncertainty, here's three things for investors to know.

First, focus on the policy implications of a divided government.

That's because the Democrats appear poised to keep the House of Representatives

and the Republicans are approaching the threshold to keep the Senate.

That would mean that regardless of which party wins the White House,

they likely won't control the whole government.

That drives our second point.

The path to fiscal stimulus just got trickier.

If it becomes evident that the Republicans will maintain the White House, a stimulus package

during the lame duck session is on the table because Senate Republicans

could de-emphasize their deficit concerns in order to support the President's demand for

fiscal stimulus. However, the path is less clear if Democrats take the White House.

Here we expect that Senate Republicans would hold on to their concerns about further expanding spending

within a recovery that they view to be self-sustaining.

Our view could of course change if Senate

Republican leadership adjusts their position and or a President-elect Biden

signals intent to pursue a different negotiation path over the next few weeks.

But barring that, more stimulus would likely require

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