Hot weekends in mid-July usually define slow news periods, even with a tight race for the U.S. presidency and the Republican convention beginning Monday, but Saturday’s attack on former President Donald Trump kicked the news cycle into overdrive. Obviously, the nation went to bed with shock and disgust at the assault and senseless loss of life, but Sunday morning broadened the focus to implications for the election and everything associated with that. Among these, of course, are the economy and capital markets.
Key points:
There is no place for violence in political discourse and it’s overwhelmingly sad that we are again faced with this reality.
We track the history of markets with special attention paid to unexpected events. The results are informative.
On median, shock periods are usually contained. The U.S. equity market tends to react to shocks negatively, falling a median of 4% over the first nine days and then typically fully recovering in seven days.
Looking only at the small dataset for shocks related to the U.S. presidency, the median decline is just 1.3%, lasting only one day with full recovery in a day and a half.