According to a study released by China Merchants Securities, we are reviewing the US midterm elections since 1970. Overall, global risk asset performance was weak in the 3 to 6 months before the election. After entering October, rising win rates and average returns generally improved, and further strengthened three to six months after the election was successful. US stocks are the most stable. The overall performance of NASDAQ, S&P 500, and Russell 2000 was weak in the first 3 to 6 months, with average earnings of -3%, 0%, and -4% for the first 6 months; 1 month before entering the election, that is, after October, the three major indices strengthened markedly, and the probabilities of increase rose to 64%, 73%, and 75%, respectively, with average returns of 5%, 4%, and 4% respectively. At the industry level, US stocks had a relative advantage in the early stages before the election. Near the election, the market gradually switched from defense to attack, and information technology, finance, industry, etc. grew and improved in a procyclical direction. Among them, information technology showed the most outstanding performance. The average earnings for the three months and the second half of the year after the election reached 10% and 15%, respectively. On the commodity side, energy performance was weak before the election, mainly because controlling oil prices and mitigating inflation were usually important policy demands of the ruling party before the election; precious metals were relatively dominant, mainly due to high political and policy uncertainty before the election, and safe-haven demand was relatively strong.

According to a study released by China Merchants Securities, we are reviewing the US midterm elections since 1970. Overall, global risk asset performance was weak in the 3 to 6 months before the election. After entering October, rising win rates and average returns generally improved, and further strengthened three to six months after the election was successful. US stocks are the most stable. The overall performance of NASDAQ, S&P 500, and Russell 2000 was weak in the first 3 to 6 months, with average earnings of -3%, 0%, and -4% for the first 6 months; 1 month before entering the election, that is, after October, the three major indices strengthened markedly, and the probabilities of increase rose to 64%, 73%, and 75%, respectively, with average returns of 5%, 4%, and 4% respectively. At the industry level, US stocks had a relative advantage in the early stages before the election. Near the election, the market gradually switched from defense to attack, and information technology, finance, industry, etc. grew and improved in a procyclical direction. Among them, information technology showed the most outstanding performance. The average earnings for the three months and the second half of the year after the election reached 10% and 15%, respectively. On the commodity side, energy performance was weak before the election, mainly because controlling oil prices and mitigating inflation were usually important policy demands of the ruling party before the election; precious metals were relatively dominant, mainly due to high political and policy uncertainty before the election, and safe-haven demand was relatively strong.