How are markets compared to the 2016 election?
With just one week to go until the US election, global markets have seen far better returns than in the six months turning up to the 2016 election, despite the COVID-19 pandemic.
In 2016, the election was held between Hillary Clinton and Donald Trump on 8 November. In the six months leading up to the election to 1 November, the S&P 500 had returned just 2.9% and the Dow Jones had returned 2.4%. Globally, the MSCI ACWI index had returned 2.5% and the ASX 200 had returned 2.9%.
Performance of major markets in six months to 1 November 2016
In contrast, with a week to go until this year’s election between President Trump and Democratic nominee Joe Biden, returns have been far stronger. This was despite the market suffering severe falls earlier in the year as a result of the COVID-19 pandemic which caused a market downturn and high growth in unemployment. The unemployment rate in the US had risen from 3.5% in February to 14.7% in April but had steadily fallen again to 7.9%, although this remained above the long-term average.
US markets had been particularly helped by the performance of the FAANG technology stocks which had driven the market higher.
The S&P 500 had returned 4.2% and the Dow Jones had returned 5.9% while the ASX 200 had been the strongest market with returns of 7.7%. The MSCI ACWI returned 5.3%.
Performance of major markets in six months to 27 October 2020
AUTHOR
Laura Dew
Recommended for you
Some 42 per cent of CEOs say they are actively reinventing their business to stay relevant in the next decade, with consumer services the most common choice for asset and wealth managers.
Former Ophir Asset Management chief executive, George Chirakis, has joined private equity manager Scarcity Partners, while the asset manager has appointed a replacement from Macquarie.
Australian Unity has appointed a fund manager for its Healthcare Property Trust, joining from Centuria Healthcare, as it restructures the product with a series of senior appointments.
Financial advisers nervous about the liquidity of private markets funds for their retail clients are the target of fund managers launching semi-liquid products which offer greater flexibility and redemptions.
