Economics Weekly: What the Financial Markets Are Telling Us About the Elections

Friday, October 16, 2020

As we draw closer to Election Day on November 3, there has been a subtle shift in market sentiment. Market participants seemingly feel that they are getting a better handle on who might win, what the two candidates might bring to the table in terms of policies, and how this could impact volatility and equity market performance. In this Economics Weekly, we take a look at what the behavior of the financial markets is telling us with regard to expectations about the election outcome. More specifically, we look at the current betting odds from the bookies, futures contracts on expected volatility, and the recent performance of the equity market and its underlying sectors.

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Richard de Chazal, CFA is a London-based macroeconomist covering the U.S. economy and financial markets.

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