Don’t overthink election’s impact on financial markets

From omfif.org

Markets are increasingly expecting a blue wave in the US election on 3 November, resulting in Democratic control of the presidency and Congress. A frontloaded, large stimulus would follow, providing a boon for equity markets. Last week, US corporate bond funds saw record inflows, with renewable energy funds seeing particularly strong performance in the expectation of a Democratic victory. Despite investor enthusiasm, however, it’s not clear that there is any meaningful relation between which party wins a US election and markets’ performance in the aftermath. While conventional political wisdom might suggest that ... (full story)