Thai Equity Recovery Tied to Nov. 3 US Midterms — SkimNews
Get the Geopolitics newsletter
Daily geopolitics — wars, elections, sanctions, the diplomatic moves that move markets. Free.
- Tisco Securities senior director Apichart Phubanjerdkul expects the Nov. 3 midterms to ease policy uncertainty and support a recovery in Thai equities later this month, while polls and prediction markets point to a strong Democratic chance of taking the House and a close Senate race; he recommends diversifying across investment themes as volatility persists in early November.
- US equities have historically delivered returns of around 1% to 6% over the one to three months following midterm elections, with a 70-80% probability of positive returns.
- S&P 500 has risen in the six months following every US midterm election across the 20 contests held between 1946 and 2022, regardless of which party controls Congress, with the difference lying mainly in the magnitude of gains, per Prakit Siriwattanaket of Merchant Partners Asset Management.
- US Congress records show the president's party generally lost seats across those 20 midterms, and the House is more likely to change control because all its seats are contested every two years versus one-third of Senate seats.
- S&P 500 rose in November 2018, then fell sharply in December before recovering in the first quarter of 2019, partly supported by the Federal Reserve's shift toward less restrictive monetary policy, after Democrats won the House and Republicans retained the Senate under Trump.
- InnovestX Securities chief commercial officer Pichai Lertsupongkit reports investors are in a wait-and-see mode over a possible US strike after the vote, with Trump indicating no further attack before the midterms; safe-haven demand has pushed gold back up from below US$3,900 an ounce late last week, its lowest level of the year.
- Krungsri Securities cites media reports of US officials preparing a short but intense military operation against Iran as early as Nov. 4, expects the market to await Trump's response after results come in on Wednesday Thailand time, and warns that Iranian retaliation against energy infrastructure or the Strait of Hormuz would push up Brent crude and add inflationary pressure.
Why it matters: The Nov. 3-4 window carries two opposite market forces: stronger congressional checks, which analysts link to less policy uncertainty and a later-November Thai equity recovery, versus a US military operation against Iran prepared for as early as Nov. 4, with Brent crude and inflation pressure rising if Tehran targets energy infrastructure or the Strait of Hormuz.
Ask SkimNews
