October was a tough month for investors. It looked a lot like February however the optics seemed worse because in February the year was just beginning (so we had time to get it back). In October, almost a year's worth of gains were vaporized in a matter of weeks. You keep hearing "Interest rates -- Tarriffs -- Midterms'' so let's get one of those variables out of the way tomorrow.

 

"But what does it all mean for my money "you ask?

 

I have attached an RBC Dominion Securities report for you to read (right here) but I thought I would also help out by summarizing the outcomes and what it might mean in very simple terms, and I have ordered them from most likely to least likely.

 

1- 50/50 (GOP senate/DEM house) -- a short term boost and likely much of the same market. Real referendum on Trump in 2020 at election time

2- No change (GOP takes both) -- short term better outcome, and markets likely move higher. Long term budget and inflation implications would weigh.

3- Total shift (DEMs take both) -- negative short term impact on markets, and likely in the medium term as well. Watch Bank and Health stocks most.

 

An important message here is that the likelihood of a positive market on the heels of the mid-terms is extremely high if we look back in history. The numbers are staggeringly in favour of a positive outcome. I think that possibility is amplified further given the level of uncertainty that exists around major economic impactors (Interest rates and tarriffs).

 

If the elections go well, and the US and China manage to work out their trade differences in the short term.....watch out. It could be a very good run.

 

Jeremy