U.S. Elections in Spotlight as Polls Open
What You Need to Know Today
U.S. Markets Mostly Gain After Elections
Historically, U.S. stock markets have generally experienced gains following presidential elections, despite some potential short-term volatility. According to data, the three major U.S. indices have consistently recorded average gains between Election Day and year-end since 1980.
Markets Slip Ahead of Election Day
On Monday, stock markets declined as investors braced for the U.S. presidential election and the Federal Reserve’s interest rate decision later this week. The Dow Jones Industrial Average fell by 0.61%, while the S&P 500 decreased by 0.28%. The Nasdaq Composite dropped 0.33%, closing at 18,179.98. In the Asia-Pacific region, markets exhibited mixed performances on Tuesday, with China’s CSI 300 index leading gains, rising by 2.28%.
China Reviews Plan to Raise Local Government Debt
China’s parliament standing committee reviewed a proposal on Monday to increase the local government debt limit, according to state media reports. Local authorities in China have historically managed significant public service spending but are facing challenges due to declining revenue from land sales to developers.
Poor China Takings Weigh on U.S. Firms
Weak revenue from China has negatively impacted the earnings of several U.S. companies, primarily due to low consumer confidence and rising competition from domestic brands. Among those affected are Apple, Starbucks, Nike, and LVMH, though some companies, such as Tesla and athleisure brands Adidas and Lululemon, have shown more resilience.
[PRO] Investors Bullish on Equities
Despite the heightened volatility in the market surrounding the U.S. presidential election, consumer confidence in equities has reached an all-time high, according to the latest Consumer Confidence survey from The Conference Board.
The Bottom Line
As America prepares to chart its course for the next four years in the presidential election, the global community is closely watching the proceedings. Candidates from both the Republican and Democratic parties have spent months campaigning across the nation. Polls in the Eastern states are set to open for Election Day shortly.
The contrasting views of the candidates regarding the future of America are likely to inject uncertainty into the markets. However, historical trends indicate that stocks typically rise after elections, regardless of the outcome. Analysis shows that the three major U.S. indices have experienced gains between Election Day and the end of the year in every presidential election year since 1980.
Nonetheless, investors hoping for immediate gains on Wednesday might be disappointed. The three indices have seen declines in the session and the week following Election Day in the past, though they typically recover within a month.
Lines from Frank Sinatra’s song “My Way” resonate with investors who are prepared to endure market uncertainty following the election:
“The record shows I took the blows
And did it my way.”
