Stocks Waver as Midterm Results Remain Unclear

“You just have politicians stop doing stuff and generally the market likes that,” said James Masserio, the co-head of equities in the Americas for Société Générale.

However, past market moves after the midterms are less conclusive on what combination of control between Congress and the White House is best for markets. The SP 500 has risen on the day after the last six midterm elections, and also posted gains in the year after the vote.

“Markets historically reward less uncertainty and split government,” Ben Laidler, the global markets strategist at eToro, wrote in a post-election report. “But it has potential for medium term pain, from uncertainty over the debt ceiling to recession spending.

The election is not the only thing on investors’ minds. Many have said that against a backdrop of high inflation, rising interest rates and tense geopolitics, the midterms have receded in importance. The next big event for investors comes on Thursday, when new data about inflation in the United States will steer expectations over how aggressively the Federal Reserve could be in raising interest rates, which raises costs for companies and dampens economic growth.

“There are these major forces that kind of drown out the election,” Mr. Masserio said.

Article source: https://www.nytimes.com/2022/11/09/business/stock-market-midterms.html