There is no doubt whoever becomes the next President of the United States of America will influence investor’s decisions, but it seems we are no clearer in knowing who that will be after the first presidential TV debate.

After a chaotic and messy debate between President Donald Trump and Democratic nominee Joe Biden where both candidates spent most of their time trading personal insults, markets didn’t initially like what they were seeing. The American people too were left frustrated and stock market futures sold off. However, the impact was short-lived as other factors kicked in on Wednesday to reverse overnight losses and all major US equity indices ended up in positive territory for the day.

Economic data continued to surprise to the upside. The private ADP report showed US companies added 749,000 jobs in September, well above expectations of 649,000. If today’s initial jobless claims along with ISM Manufacturing also surprise higher, there is a good chance that Friday’s non-farm payrolls report will be encouraging.

The prospect of a new coronavirus stimulus deal was another source of support to risk assets. Treasury Secretary Steven Mnuchin said yesterday he is hopeful about striking a deal with the Democrats on a new package, and that’s likely to be the most important factor for markets in the days ahead.

Even if the jobs data reflects a brighter picture of the US economy, without further stimulus that trend will come to a halt as the latest large corporate announcements indicate dark clouds gathering on the horizon. Disney announced it would lay off 28,000 employees across its US resort business, Royal Dutch Shell said it would cut up to 9,000 jobs by the end of 2022, Marathon Petroleum began another round of firing and American and United Airlines are on the way to furloughing 30,000 workers if the government doesn’t provide additional support. And that list of job cuts continues to grow. If Congress does not act fast enough, expect to hear more of these announcements.

Regarding the Presidential election, while Joe Biden continues to lead in the polls, investors also need to keep an eye on the Senate. If Democrats manage to take 50 or more seats, which latest polls are indicating, there will be a high chance of a clean Democratic sweep which markets will not like, at least in the short term. Higher taxes and more regulations will become a reality and that’s negative for equities. As we head into November, expect the election risk premium to grow further and hence drive more volatility in asset prices.