November stands to be a crucial month for investors due to various events likely to influence the market environment. Below is a close analysis of these potential moments.
Election Outcome and Policy Implications:
● The outcome of the November 5th elections could potentially change fiscal policies affecting healthcare, defence, clean energy, and technology industries and sectors.
● Forecasted Market Impact:
- In the event of a Democratic (Kamala Harris) win, industries like renewable energy and infrastructure could see a boost, with renewable stocks potentially rising 2% - 3% in response to favourable policy outlooks.
- A Republican (Donald Trump) win could favour oil and gas shares, with a 1% - 2% price increase forecast as energy policies focus on conventional fuel production and reduced environmental regulations.
Market Volatility:
● The November election month has historically seen a 1.5% - 2% increase in market volatility, according to the CBOE Volatility Index (VIX).
● In the five trading days after the last three midterm elections, the S&P 500 averaged a 1.2% gain as investors responded to decreased uncertainty.
● 2024 Forecast: If a clear win is confirmed, we should expect a 1% - 1.5% post-election rally in the S&P 500, assuming no extreme policy surprises.
Holiday Retail Season:
● November kicks off the biggest shopping period, with Black Friday and Cyber Monday sales expected to hit $40 billion in the US, a 5% increase from 2023.
● Retail shares could see increased attention, especially e-commerce and consumer electronics, with an anticipated 2% - 3% month-over-month increase for leading companies.
Historical Market Strength:
● The “Santa Claus rally” has historically lifted share prices an average of 1.3% in November, according to data from 1928 - 2023. The positive momentum often continues into December, as year-end optimism boosts equity prices.
With the 2024 US elections on the horizon, market participants are gearing up for heightened volatility. The deeply polarised political climate and critical issues at stake suggest that financial markets may react sharply to election-related developments.
Disclaimer:
*Any opinions, views, analysis or other information provided in this article is provided by BCS Markets SA trading as BROKSTOCK as general market commentary and should not be viewed as advice according to the FAIS Act of 2002. BCS Markets SA does not warrant the correctness, accuracy, timeliness, reliability or completeness of any information provided by third parties. You must rely upon your judgement in all aspects of your investment decisions and all decisions are made at your own risk. BCS Markets SA and any of its employees shall not be responsible for and will not accept any liability for any direct or indirect loss including without limitation any loss of profit which may arise directly or indirectly from use of the market commentary. The content contained within the article is subject to change at any time without notice. BCS Markets SA is an authorised financial services provider FSP No. 51404.
** This article was prepared by BROKSTOCK analyst Maboko Seabi
