The run-up to the US elections
As we enter August, the focus of financial markets will turn more towards the US elections. The chart below, compiled by Morgan Stanley, reveals US equities generally tend to struggle somewhat in the run-up to US elections. With elevated economic and political uncertainty, we cannot rule out that equities might face some headwinds this time as well – particularly as Democratic candidate, Joe Biden, has taken a clear lead in the polls. Historical data show equities perform less well when the incumbent party loses and the president is not re-elected. The odds of this happening have increased significantly in recent months. What is more, Trump might revert to more drastic policies or statements to try to gain in the polls. Today’s banning of Tencent’s WeChat, in addition to TikTok, might be an example of this.
As a senior portfolio manager I use charts to illustrate financial issues every day. I tweet my favorites as @jsblokland and was named 'one of the 50 most important people for investors to follow in 2018' by MarketWatch.
Previous editions of the daily sketch can be found on my personal financial markets blog. All graphics provided are collected from Bloomberg data and public websites. They do not always reflect my personal opinion and may also not necessarily reflect the opinion of Robeco. Please cite all references or quote the original source if replicating content.
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