Broker Check

S&P 500 Volatility During Midterm Election Years

| February 01, 2022

The current minor volatility across global equity markets has exhibited sentiment jitters that have sparked fears, and rightfully so. Volatility of this nature has not been evident since the depths of COVID in March 2020.  The tendency of investors to seek a definitive reasoning for daily volatility is something that grasps media headlines daily, largely to a fault, in our view. The reality is that short-term volatility rarely has a tangible reason for its occurrence that becomes immediately apparent. We would argue that we’re living in such an environment right now where market participants are juggling the potential actions of the Federal Reserve, earnings and economic growth expectations, as well as the outcomes of the upcoming midterm elections. On the latter, it remains paramount to focus on the market’s seasonality of returns during midterm election years. This may imply an above normal volatility that we believe may spur the next secular cycle of market growth.

Source: Bloomberg. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All information is historical and there is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Investment advice offered through CX Institutional, a Registered Investment Advisor.