![]() Simply put, politicians don’t get re-elected by negatively impacting the economy. There’s a simple truth inherent in politics: Whether a first-term senator, a long-serving member of the House or the Oval Office incumbent, a politician’s number-one job is almost always to get re-elected. A politician’s priority: To get re-elected To fully understand why, let’s dig under the covers a bit. through much of 2021, regardless of any changes to the political makeup in Washington. Put another way, we think that COVID-19 will likely lead to increased policy stability in the U.S. economy will be influenced far more by the outcome of the COVID-19 crisis than by any new policies or proposals. The long and short of all this? Over the next 12 months, we believe that the U.S. 4 In addition, even in a best-case scenario, a vaccine is probably still a few months away. Most schools remain closed to in-person learning, and approximately 24% of the U.S. 3 Unemployment remains stubbornly high at 8.4%-more than double February’s 3.5% reading. Of the 22 million jobs lost due to widespread lockdowns in the spring, the U.S. The coronavirus pandemic has upended daily life as we know it, and despite the swift rebound in markets, the economy has a very long way to go in its recovery. Regardless of whether the Democratic or Republican party is in control, market uncertainty is typically sky-high during this time.īut these are not normal times. Uncertainty over what current policies might be unwound, uncertainty over what new reforms might be enacted, uncertainty over the degree of change coming down the pike. A different political landscape, of course, typically means different policies and priorities from government leaders-and in the eyes of the market, different means uncertainty. And, in normal times, these concerns wouldn’t be unfounded.Īfter all, a win by Joe Biden over Donald Trump, coupled with a Democratic majority in both the Senate and the House of Representatives-both plausible scenarios 2-would make for a very different political landscape in Washington, D.C., next year. It’s hardly a surprise, then, that with less than two months to go until Election Day in the U.S., the nation is abuzz about the possibility of renewed market uncertainty come November-especially if the Democratic party wins control of both Congress and the White House. Not convinced? Look no further than this past March, when the S&P 500® Index tumbled nearly 35% in just over a month as one of the most unpredictable events of our lifetimes-the coronavirus pandemic 1 -quickly engulfed the U.S. Above all else, markets detest the unknown. ![]() It’s no secret that uncertainty is public enemy number one to the stock market.
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