There are several potential market movers this week. There is a theme we are calling the 3 E’s, which are the earnings, the election, and the economy. Starting with the election, we believe the market has priced in a Clinton victory. Now attention is turning to the House of Representatives.
Today it seems that the markets have priced in Hillary Clinton winning the election and the republicans retaining control of the House and Senate. What will bring about market volatility is any uncertainty about the results of the election.
All eyes in our country right now are on the presidential debate. We believe that there are so many other things we should be debating in this country. These other topics tie to the investor and the American voter who have retirement accounts and investment portfolios.
Right now, many people are focused on the presidential election. This can be one of several shiny objects that can distract the markets and your portfolio. Some investors may be distracted from focusing on the important issues that could affect their investments.
Historically, the markets react differently after a presidential debate depending upon who it perceives as the debate winner. Regardless of who your candidate is, the market will respond with its own perception. Here is what we believe could happen in either scenario.
The markets can be viewed as a football field. You may have your portfolio or team on the field. The Fed is the referee and the Fed can pull out the flag and call a penalty. We are seeing a lot of market volatility because the Fed has been making a lot of penalty calls recently, especially on this past Friday.