Will the Market Pass Its Mid-Term?
The market backdrop of low interest rates and strong earnings growth may be favorable for equities in 2018 but on November 6 mid-term elections will decide the fate of hundreds of seats in the U.S. Congress. How might the market react?

  • Given the shifting landscape in Washington, D.C., one might expect the possibility of a change of control in the mid-term election to have a negative impact on the stock market.
  • However, the market tends to cheer the clarity that follows the elections with a strong return of 6% on average in the three months following mid-term elections since 1986. In the 12 months following the mid-term elections, the average market return has been 13% since 1986. If history is any guide, the market may be comforted by the completion of the elections this year as well.

The views expressed are the views of Fred Alger Management, Inc. as of September 2018. These views are subject to change at any time and they do not guarantee the future performance of the markets, any security or any funds managed by Fred Alger Management, Inc. These views are not meant to provide investment advice and should not be considered a recommendation to purchase or sell securities.

Risk Disclosure: Investing in the stock market involves gains and losses and may not be suitable for all investors. Investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Many technology companies have limited operating histories and prices of these companies' securities have historically been more volatile than other securities, especially over the short term. Technology companies may also face increased competition, government regulation, and risk of obsolescence due to progress in technological developments. 

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