Stocks Face Uncertainty Ahead of Contentious 2024 Election
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Stocks historically perform well in presidential election years, but 2023's gains may preclude additional pre-election rallies in 2024.
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Markets tend to be more volatile in election years. Other concerns include high valuations and investor expectations for more Fed rate cuts than likely.
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The 2024 election is expected to be highly contentious, with Trump the Republican front-runner to challenge incumbent Biden. Political dysfunction could spur market volatility.
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Incumbents running for re-election have never seen stocks fall in election years. But recession in election run-up tends to lead to incumbent defeat.
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Stocks rallying ahead of elections typically indicates strong voter sentiment and incumbent advantage. But early 2024 volatility could reflect economic/political uncertainty.