How do Canadian Elections affect the Market?
I know we are late with this but the recent elections made us wonder the effect of the elections on the market.
So, we did our homework so we can summarize things for you.
There are a couple of academic studies that are summarized in an RBC article on the same topic.
They conclude that the end of uncertainty positively affects the market. In other words, markets tend to rise in the weeks coming up to an election as uncertainty decreases. While we did see a modest rise in the markets at the end of September, the market reversed just before the election. So, the axiom didn’t hold true this year.
Now, more than ever, our markets are heavily impacted by global markets and especially the American market. Thus, this year markets were more influenced by global uncertainties (China trade war and Middle East tensions) than by Canadian elections. We suspect that will true in future elections.