The Elections Are (Finally) Over – Now What?

There is not much to say about the mid-term elections beyond what has already been said ad naseum. The bottom line is that the outcome was largely as anticipated – the Democrats regained control of the House (though by a smaller margin than expected by those hoping for a “Blue Wave”) and they also made net gains in gubernatorial races, but the Republicans increased their majority in the Senate. The pollsters who so badly called the 2016 Presidential election were at least partially redeemed.

Elections can drive extreme emotions in all directions, but the relevant question for investors is, “What is the impact on US markets?” A handful of charts makes the case that the answer is, “Business as usual.”

First, from Bespoke Investment Group comes two charts that illustrate the historical performance of the stock market following mid-term elections, breaking it down by which party was in charge: