Midterm elections are just around the corner.
And with it, we’re likely to see volatility, as usual.
- Ahead of the midterm elections in 1990, the VIX jumped from 16 to 36
- Ahead of the midterm elections in 1994, the VIX jumped from 11 to 18
- Ahead of the midterm elections in 1998, the VIX jumped from 16 to 45
- Ahead of the midterm elections in 2006 and 2010, the VIX fell
- Ahead of the midterm elections in 2014, the VIX jumped from 12 to 40
- Ahead of the midterm elections in 2018, the VIX jumped from 12 to 37
Heading into the vote on November 8, 2022, we may see another spike.
That’s because the results could reshape President Biden’s ability to pass policies in the second half of his term. While we’re not going to offer our political opinion here (it has no place), it wouldn’t be unusual if the Democrats lost the House.
In fact, as noted by Forex.com:
“Democrats lost the House in 2010 midway through Barack Obama’s presidency, and Republicans lost the House after two years of Donald Trump’s. If Republicans take congress in the upcoming midterms, Biden will likely lose any chance of passing policies, but US stocks might actually gain ground. According to historical data, from 1901 onwards, a Democratic president combined with Republican control of both houses of Congress has produced annualized real stock returns of 8% for the Dow Jones.”
Again, though, there are no certainties.
