Watch the US Midterm Election Closely as the Result Will Hit Global Markets Soon!

This is the most closely watched, most expensive and most fretted-about congressional elections in memory. How the US stock markets will perform in the next two years depending on the outcome of this 2018 midterms. And as we know, the global markets often take in whatever happens in Wall Street to consider their ups and downs.

 

The polls show that the Democrats are poised to win the majority in the House of Representatives, and the Republicans will maintain their majority in the Senate. However, there is no guarantee as Trump had made amazing rallies of 11 times in eight states over only six days after the polls have been collected.

 

And what is this “midterm election” has anything to do with the stock markets? Of course, the midterm will have a huge impact on the markets. According to the historical record, the stock markets always rise for about 12 months after the midterm election no matter who wins or loses. To be precise, that is in the long run for the market. There are supposed to be a little turmoil ahead of the election and before the result. We can see that the pre-market Dow Jones and S&P 500 slightly dip ahead of the election as investors feel uncertain on how this election will turn out. Especially, if the Democrats are able to take the lower house, Trump would not be able to go around as freely as before, and that includes all his plans and policy as well.

 

So, would it be better if the Republicans still maintain the majority of the two houses after this, since the market had been growing under the reign of Donald Trump?

Take S&P for example. The index has surged 28% since Trump sits in the White House, and that has been only two years.

Investor confidence stemming from the tax cuts and Trump’s other business-friendly policies so far have more than made up for ongoing worries on Wall Street that his trade conflict with China is hurting the U.S. economy.

The tax cuts also led Apple Inc. (AAPL) and other multinationals in the technology sector to repatriate billions of dollars in profits held overseas, some of which went toward buying back stock and sending Wall Street higher.

Nevertheless, not all companies took in this positive sentiment as others did. The S&P 500 energy index was flat since Trump’s election, even though crude prices LCOc1 rose over 50% during that time and despite Trump putting the brakes on Obama-era policies aimed at reducing the country’s reliance on oil.

Some analysts say that investors should expect pressures on stocks if Democrats gain control of the House of Representatives and a sharper downward reaction if they sweep the House and Senate. Meanwhile, other analysts see that even losing the House of Representatives would only turn the markets into a neutral state, and Washington might have come to an agreement with Beijing even sooner.

On the other hand, if the Republicans are able to maintain in both houses somehow, it may be possible to see a surge in Wall Street.

 

It is true that the US stock markets tend to rise after the midterms, while the rest of the world will also receive positive sentiment as a benefit. However, if we look back to the Thai stock market around the time of the midterm election, SET actually fell continuously for quite a while, but was able to regain its stance afterward.

 

According to the estimation of counting the votes in the US, the result should be clear around Wednesday afternoon or night in Thailand. Just remember not to jump ahead of the official result as the Democrats had done on 2016, believing that Clinton won the presidential election.