Investors will benefit from supportive policy under either outcome, but the impact on specific industries is much harder to predict.
On Nov. 6, 2016, two days before the last presidential election, Politico reporter Katelyn Fossett outlined the 16 worst political predictions of that year.
Yields rise on signs that the Fed is not in a rush to ramp up asset purchases. The ECB faces decisions as COVID-19 surges.
Weekly Market Compass: Markets could be faced with a contested presidential election, rising COVID-19 rates, and a stalled fiscal stimulus deal
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U.S. Treasury rates closed higher last week, led by longer maturities. A constructive market tone lifted rates and supported risk assets. Prospects for additional fiscal stimulus prior to the U.S. election dimmed, but rates rose nonetheless as the yield curve steepened.
Stocks snapped a three-week winning streak last week, with the S&P 500 Index dropping 0.5%. The U.S. elections continued to dominate the headlines, with polls showing an increasing likelihood of a Biden victory and Democratic sweep of Congress. The on-again, off-again fiscal stimulus negotiations were also in the news with expectations growing for a postelection package.
As the election approaches, market participants are being more cautious about their investment decisions. While there are a lot of market-centric reasons for this approach, there are as many non-market related ones as well.
Markets are increasingly reflecting a unified Democratic government outcome that may lead to a significant fiscal expansion. This electoral outcome would bring forward the market pricing of the higher inflation regime that we were already reflecting in our strategic asset views.
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Value stocks have underperformed Growth stocks by the largest magnitude and longest duration in 40-years.
What – other than the election – should be commanding investor attention these days? Our vote would be the bond market. To help put politics and the bond market in the same neat little box, we turn to renowned political consultant James Carville, who in the early 1990s said, “I used to think that if there was reincarnation, I wanted to come back as the president or the pope or a .400 baseball hitter.