With the U.S. midterm elections now just three months away, Goldman Sachs believes political developments are likely to become a more influential driver of market sentiment, potentially leading to higher volatility in the S&P 500 over the coming months.
Strategists led by Ben Snider said historical trends support the expectation that uncertainty surrounding economic policy typically increases as election season approaches.
"In past cycles, economic policy uncertainty has usually risen in the August ahead of midterm elections and remained elevated in the subsequent few months," strategists led by Ben Snider said in a note.
According to Goldman Sachs, that historical pattern strengthens the argument for maintaining exposure to equity index volatility in the near term.
The bank noted that unusually low correlations between individual stocks have helped keep overall index volatility subdued, despite significantly higher volatility at both the stock and factor levels.
#midterm #historical
Strategists led by Ben Snider said historical trends support the expectation that uncertainty surrounding economic policy typically increases as election season approaches.
"In past cycles, economic policy uncertainty has usually risen in the August ahead of midterm elections and remained elevated in the subsequent few months," strategists led by Ben Snider said in a note.
According to Goldman Sachs, that historical pattern strengthens the argument for maintaining exposure to equity index volatility in the near term.
The bank noted that unusually low correlations between individual stocks have helped keep overall index volatility subdued, despite significantly higher volatility at both the stock and factor levels.
#midterm #historical
4 days ago
