2024 Election Bonanza: Brace for Short-Term Market Jitters Amid a Wave of Global Votes
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2024 will see an unprecedented number of elections around the world, with over 4 billion people eligible to vote across 50+ countries. This could temporarily increase economic uncertainty.
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Evidence on how elections impact financial markets is mixed. Stock returns don't clearly rise or fall before/after elections. Market swings often have more to do with wider events.
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Investors do seem to dislike uncertainty - indices measuring fear/nervousness often peak around elections. But markets then stabilize afterwards.
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Currencies like the British pound and US dollar do tend to weaken in the month of elections, suggesting investors get cautious. But forex impact is short-lived.
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With so many major economies voting in 2024, there are risks of market contagion and volatility in the short term. Long term, the economy's health will matter more.