Mr. Market may not fear politics so much after all

Unless the presidential election eventually creates havoc on the financial markets, several analysts have voiced their optimism as for a possible year-end rally. Oil prices are still low but have stabilized. Despite ongoing concern, China’s “hard landing” didn’t happen. The post-Brexit so-called apocalypse lasted for just 3 days before stock markets quickly recovered. The euro area has been struggling but another acute crisis like the 2011 sovereign debt’s looks distant.

Summing up, according to analysts, that’s why 2016 may be a positive year for the markets after all. Things didn’t go as bad as one may have forecast it would. The same is true about the US presidential race. Although a majority of financiers fears the election of the GOP nominee Donald Trump, the fundamentals of the US economy may not be really questioned by whoever is POTUS. In recent years, research in economics suggested that the White House – and DC politics in general – have less and less impact on the economy.

The more globalized is the economy the more politicians become powerless about it. Although political risk most often results in a mediocre economic outlook, the United States is deemed politically stable enough for financiers not to fear politics as much as it’s being reported in the news. Trump or Clinton, the vote will likely generate some temporary fear or euphoria, however Mr. Market may finally have the last word and act on his own.

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