US elections monitor: looking back to look forward

In the first of a two-part series, we explore the potential impact on markets of the US elections in November. Our starting point: what does history tell us about how markets perform under Republican versus Democratic presidents?

Key takeaways:

- The countdown to the US elections in November is well underway and the market response to the outcome will be crucial.
- Our analysis shows US equities tend to shine under Democratic presidents, but US Treasuries do best during Republican terms.
- We found that both equities and bonds perform better when the governing party lacks a majority in Congress.
- We think more resilient economic growth and higher inflation under Democratic presidents may, in part, explain the historical pattern.