This year, around half of the world’s population will take to the ballot box as 64 countries hold elections. Here is an update on key elections happening around the globe.
Sir Keir Starmer is the UK's new prime minister, after his Labour Party swept to power in a landslide general election victory. The Conservative Party suffered a dramatic collapse after a tumultuous 14 years in power, which saw five different prime ministers run the country. It lost 250 seats over the course of a devastating night. The election outcome is unlikely to influence the short-term trajectory of interest rates or inflation. Although Labour has some big plans, it will likely face financial constraints, so the Autumn Statement will be one to watch. The initial impact on markets has been very muted given the financing challenges Labour will face.
Joe Biden has suffered less polling damage than might have been expected after his disastrous debate against Donald Trump, while Kamala Harris, the vice-president, and the president’s most likely replacement should Democrats switch candidates, had mixed results when positioned against Trump.In polling carried out since then, Biden is trailing by one to two points more in some surveys, but the movement is still within the margin of error, and few of the results reflect a radically altered race.
France’s parliamentary election saw no clear winner, plunging the country in uncertainty and leaving everyone wondering who will be the country’s next prime minister. No party or coalition won enough seats (289) to claim an absolute majority in the National Assembly, the country’s lower chamber. As a consequence, nobody can propose the name of a prime minister with the assurance that they would get the support of a majority of lawmakers in a vote. The left-wing New Popular Front alliance came in first, with 188 seats, followed by the centrist alliance of French President Emmanuel Macron, Ensemble, which won 161 seats. Both of these are coalitions of various parties. After triumphing at an EU election last month, the far-right National Rally ended up third (142 seats.) It is, however, the biggest single party. From Thursday, July 18, things might start to look a bit clearer. On that day, lawmakers will gather for the first time at the National Assembly and will vote to choose their next parliament president. The president of the National Assembly plays a key role as they direct discussions and debates. But this timeits election will be watched even more closely because that vote will give some first indications on whether some alliances (and potential coalitions) are taking shape. That could give us an insight into how the French parliament will function in the future.
This year, around half of the world’s population will take to the ballot box as 64 countries hold elections. This can induce anxiety in investors as uncertainty looms.
On the other hand, speculating on the outcome of elections can also leave some investors trying to time the market. However, history shows that markets are very resilient over time regardless of the political and global landscape. Elections and other geopolitical events can trigger short term volatility in the market but can rarely distort the long-term potential of diversified investments. As the chart shows, changes in government both party or party leader can be frequent, but the stock market has continued to grow stronger. We advocate that the key to success in investing lies in time in the market not timing the market.
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