US Elections: The Implications For Equities

US Elections: The Implications For Equities



When considering the upcoming US election, we think it is worth noting a few general observations from previous ones. They are binary events and notoriously difficult to predict, as relatively small shifts in voter decisions within swing constituencies can significantly impact the outcome at the national level. This is partly why national polls are often unreliable when it comes to predicting the result. Previous election years in the US have been positive for equity markets but conditions have been more volatile due to elevated political risk. Over the longer term, the economic outlook and company profit forecasts are more important to markets. They are discounting mechanisms and market participants are anticipating the potential outcomes. So any significant political risk will be partly reflected in equity prices, which will then adjust rapidly when the result is announced. If the outcome is inconclusive, there is likely to be an extended period of uncertainty.


Daniele Antonucci

Chief Economist & Macro Strategist

James Purcell

Group Head of ESG, Sustainable and Impact Investing

Bill Street

Group Chief Investment Officer

Non-Independent Research

The information contained in this article is defined as non-independent research because it has not been prepared in accordance with the legal requirements designed to promote the independence of investment research, including any prohibition on dealing ahead of the dissemination of this information.

How to Use this Information

This article contains general information only and is not intended to constitute financial or other professional advice or a recommendation that any recipient of this information should make any particular investment decision. Always consult a suitably qualified financial advisor on any specific financial matter or problem that you have.

Except insofar as liability under any statute cannot be excluded, neither Brown Shipley nor any employee or associate of them accepts any liability (whether arising in contract, tort, negligence or otherwise) for any error or omission in this article or for any resulting loss or damage whether direct, indirect, consequential or otherwise suffered by the recipient of this article.

Investment Risk

Investing in stocks either directly or indirectly carries investment risk. The value of equity based investments may go down as well as up over time due to factors such as, market volatility, interest rates, and general economic conditions.