Nov 3, 2026 · 26 min
Midterms put a market-friendly post-election pattern to the test
Is the post mid-term period a good one for US stocks?
The episode weighs uncertain 2026 election outcomes against historical seasonality and current market conditions shaping U.S. equities.
- 1A possible Democratic wave raises questions about how election uncertainty could affect U.S. stocks and broader markets.
- 2Historical post-midterm performance offers a potentially favorable equity entry point, but current conditions complicate the pattern.
- 3Recent market internals, macroeconomic forces, and foreign exchange trends provide essential context beyond the election narrative.
Don't miss
The episode’s key tension emerges in the comparison between a historically favorable post-midterm period and current market internals that may challenge the pattern.
The brief
John J. Hardy frames the 2026 U.S. midterms as a market question, with results arriving late in European time zones and no certainty about the political outcome.
The discussion tracks rising expectations of a Democratic blue wave or blue tsunami and considers what such a result could mean for investors and the S&P 500.
Nate Silver and Donald Trump enter the election discussion as the episode examines shifting probabilities, political stakes, and the difficulty of translating them into market forecasts.
The central historical question is whether the period after U.S. midterms has tended to provide a favorable entry point for equities, especially when viewed against present conditions.
Recent market internals, macroeconomic developments, and the foreign-exchange backdrop complicate any simple seasonal conclusion, making the post-election setup a test rather than a promise.
What was said on this episode
6 statements · 3 positive · 2 negative · 1 neutral
U.S. stocks have generally performed reasonably after midterm elections
“the post midterms action has been reasonable”
Listen at 8:06
High prior S&P 500 returns may reduce expected subsequent returns
“your expected returns might be a little bit worse when you're starting from such staggeringly high performance over prior years”
Listen at 9:14
Midterm elections are not reliable indicators of future market direction
“I wouldn't use the midterms of the political cycle as being very indicative. of where the markets might head.”
Listen at 9:27
The U.S. dollar will eventually weaken
“I think it's eventual weakening”
Listen at 17:18
A U.S. fiscal bailout will occur without a U.S. Treasury default
“the bailout, when it comes, and it will come, because the U.S. Treasury must be funded. We're not going to have U.S. defaults.”
Listen at 20:40
A future AI-bubble collapse and recession will trigger massive policy responses
“Once and if the AI bubble collapses and the next recession is incoming and markets on the defensive and the US Treasury needs to stay funded, all of the above, there will be new massive policy responses to keep the whole thing moving forward.”
Listen at 23:17
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.
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