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
Australian fund managers are actively seeking to launch Cayman versions of their funds to attract offshore flows, with Regal Partners set to launch its latest offering this month.
As private markets gain traction in Australia but only a limited pool of talent is available, three recruiters explore whether fund managers should consider looking overseas to find top talent.
With an explosion of private credit managers appearing in the market, two alternatives experts believe a consolidation is needed to maintain the quality of the sector.
Bentham Asset Management has become the latest fund manager to expand its distribution team as it reports increased interest in its credit strategies.
