What could be more nerve-racking than Election Day? Some will, of course, think it to be the $2 billion Powerball drawing … which was delayed … but the numbers are finally in (and much to my extreme disappointment and enormous surprise, I didn’t win).
Meanwhile, stocks are up so far today … which the Wall Street Journal claims is quite typical for a mid-term election … using data since 1970. The reason most often given is related to a split government … which polls show may happen in the days to come … and gridlock in Washington is actually seen as a good thing by investors.
And how have stocks done following the midterm election? Hold on to you hats. According to Forbes, there have been 18 mid-term elections since 1950 … and not only was the 1-year market return following the election positive all 18 times … but the average returns were 18.6% (vs. 10.6% in other years).
All that sounds good, but we have possible recession and inflation to contend with … so how might that affect things?
Well, one area that boosted inflation … the increase in rents … could be slowing … as RealPage Market Analytics claims a sharp decline in October and Deutsche Bank calls for a reduction in inflation rate growth as it pertains to rentals. The Fed would like to see this (at least, I think they would).
Oh, and before I forget … a lot of people seem to play Wordle. As noted below, the rules changed slightly to make it a bit more challenging. I will say that I find it much more interesting to play a related game called “Quordle” (quordle.com) which takes a lot of the “luck” out of things.
That about wraps it up for today … as I have to run out to vote …
… and re-check my Powerball numbers.
Have a great day,
Joseph G. Witthohn, CFA
Emerald Asset Management PA, LLC
610 Freedom Business Center Drive
King of Prussia, PA 19406
Direct: (610) 285-9905
cell: (856) 625-7915