BlackRock: How will the US election affect the US stock market in the second half of the year?
What impact will the U.S. election have on the U.S. stock market in the second half of the year? BlackRock stated that the U.S. election cycle has its unique internal logic, and the summer slump in the U.S. stock market often improves in the fall. Historical data shows that May to September is usually a "weak period" for U.S. stocks, but in a "election year" special context, this seasonal pattern often shifts from summer to fall. In addition, investors need to be alert to seasonal factors and upcoming major events, while market sentiment also significantly affects short-term investments. Investor sentiment is gradually becoming cautious, facing high inflation, adjustments in Federal Reserve policy, and escalating geopolitical risks
According to the Smart Finance app, BlackRock stated in a post that the tension surrounding the 2024 US presidential election is escalating. This political battle not only foreshadows a reshaping of the US political landscape, but its chain reaction will also profoundly impact the global political and economic landscape, potentially bringing more uncertainty to the stock market. The US election cycle has its unique internal logic, with the summer slump in the US stock market often improving in the fall. BlackRock believes that this may be related to investors' wait-and-see attitude before the election, with the market being more influenced by the election once the party conventions and fall campaigns truly kick off.
BlackRock pointed out that historical data shows that May to September is usually a "soft period" for US stocks, with the average monthly return during this period (about 0.1%) much lower than the return levels in other months (about 1%). However, in a "presidential election year," this seasonal pattern often shifts from summer to fall. Despite benefiting from the strong momentum of US corporate profit growth this year, US stocks have shown decent performance supported by economic resilience. Nevertheless, in this period full of variables this year, investors need to be more vigilant about some seasonal factors and upcoming major events.
Furthermore, BlackRock stated that market sentiment also significantly affects the volatility of short-term investments. Faced with high inflation, adjustments in Federal Reserve policy, and escalating geopolitical risks, investor sentiment is gradually becoming more cautious