Given expectations of material changes in the contours of Congress after next week’s elections, it is not inconceivable that the leader of the Democratic Party, President Obama, could launch a “November Surprise.”
While this is pure speculation, our hunch is that it could be related to the Afghan war which is very unpopular with the far left in the US. A narrative could be that, given revelations of Iranian cash making its way to close aids of Afghan President Karzai (WSJ), President Obama decides to materially accelerate the withdrawal of troops. This could energize Democratic leaning voters and throw greater uncertainty into the election mix. This uncertainty could prove unsettling to financial markets in the very near term.