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Will US Midterms Give Stock Prices A Vote Of Confidence?

Daniel Chase

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Midterms Matter

Few people recognize the importance of midterm elections in the U.S. and this notion presents a potential threat to the future of American democracy as we know it. Over the course of the last few weeks, we have witnessed events in the news with increasing severity, resulting in a nation guided by fear. Last week, a mass shooting took place at a synagogue in Pittsburgh, striking fear and pain in the hearts of the global Jewish community. One week prior, an individual sent packages containing improvised explosive devices to prominent political figures around the country. 

How we, as a country, respond to these threats is largely dependent on the people we elect to represent our interests in government, as well as the legislation we agree, should be brought to the table. It is for these reasons, among many others, that the midterm elections are crucial for the fate of our nation. While we are a nation built on the hopes and aspirations of its people, we are a nation funded by capital and driven by a growing, healthy economy. Historically, the midterm elections have resulted in upward trends for the stock market. 

In fact, according to comparative statistics, since 1946, there have been eighteen midterm elections and stocks have improved in the following months after every single election. Since World War II, whether a Democrat signed the White House Lease and the Grand Ol’ Party got hella congressional, the market has always positively responded to the events of the midterms. 

Election Results and Market Trends 

According to Forbes, stocks have climbed an average of 18./4% in the nine-month period from Sept. 30 through June 30 of the following year. Analysts point out that given we are 75% through the current presidential term, usually the strongest year for the market, the midterms on Tuesday will potentially bode well for investors. 

As for the method to this madness, political analysts offer a simple theory. Every President from Barack to Bush, and back, more than anything, wants to be reelected. Whether they want to further their legacy or make good on promises to “bring our troops” home, the leaders of our country want to stay in office as long as possible. One of the biggest indicators of success for a country is the strength and wellness of their economy and who else but the President can assure this takes place? Naturally, a stimulated economy causes the stock market to react positively, thus pleasing investors, who then laud the current President with impressive approval ratings. 

Boom, reelection. It’s a predictable, yet effective cycle. 

Of the nineteen presidents who’ve sought reelection since 1900, fourteen found success. If my junior high math skills are sufficient and intact, that’s a 73.6% chance that President Trump will be reelected if he chooses to go for the gold in 2020. Jeff Somer, a political contributor for the New York Times, argues that given the reelection history for presidents coupled with midterm-market correlations, the second half of a presidential term is the best time to sweeten the economy as reelection looms shortly after. After the disastrous October the market endured, both company executives and investors are hoping that the midterms repeat their 70-year pattern and bring the stock market back to life. 

“Markets will be closely watching the upcoming midterm elections as shifts in the balance of power in Washington could have meaningful implications for fiscal policy and foreign relations.”

Niladri Mukherjee, Director of Portfolio Strategy, Merrill Lynch

Tuesday’s midterm elections are expected to give Democrats control of the House of Representatives and keep Republicans safe in the Senate. Though this creates a diametric split in the legislative branch of government, economists believe the legislative gridlock “won’t necessarily weigh on the markets or real economic growth.” 

The bottom line is Americans need to get out and vote. If you’re interested in seeing fiscal policy passed by legislators, do everything in your civil power to elect representatives who will see to it that these laws come to pass. 

Given the historic correlation between the health of the US economy and the success of the stock market, it would be foolish not to voice your opinion, but, ultimately, that choice is up to the individual. 

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Energy

Saudi’s Minister Has No Plans To Boost Oil Production After Iran Oil Waivers End

Jon Phillip

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oil and gas news

On Wednesday, Saudi Arabia’s Energy minister Khalid al-Falih said that there was no need to immediately increase oil output. This followed the ending of waivers granted by the US to Iranian crude oil buyers. He added that Saudi Arabia will only respond to increase oil output if there is an increase in demand.

The Decision Not To Increase Output Based On Market Fundamentals

The minister said that his decision was based on oil market fundamentals rather than prices and that they still remain focused on stabilizing the global oil market.  Speaking in Riyadh, Falih said that despite the rising of inventories as a result of sanctions on Iran and the situation in Venezuela it was not necessary to have an immediate response to increase oil output.

Last year the US granted Iranian oil buyers exemptions from sanctions but it has tightened the line by deciding not to renew them.  Saudi Arabia intends to remain within its OPEC production limit as well as be intent to its customers. More so those under waivers and those that have seen their waivers withdrawn. 

The minister said that they are not going to pre-empt the same and increase their output. Oil production number for May are set. It had little variations from previous months. Furthermore, crude oil allocations for June will be decided next month.

Oil Prices Have Been Increasing Since November

Since November, Oil prices have increased. This follows the announcement by the US that all waivers on imports of Iranian oil will not be renewed to put pressure on buyers to stop buying oil, from Iran. This ends up tightening global oil supply. 

On Wednesday, Brent Crude futures dropped to trade at $74.18 per barrel. This followed a statement from the International Energy Agency. This indicates that markets are adequately supplied and global production is stable.

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Reviving The Lost Interest In The Gold Mines: McEwen

Joe Samuel

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gold mining stocks to buy

From the viewpoint of a mining executive, a loss in interest in gold mines is being assessed. After dabbling in other activities in the mining sector, firms and companies must switch back to their core activity of finding new gold mines. What could this mean for mining stocks?

Rob McEwen, CEO and Chairman of McEwen Mining (MUX) says, the first few months of the year has brought and encouraged the attention and interest of the investors in the mining of precious metals sector. But, now it is extremely important to bring up some new discoveries and execute some exploration plans in order to give consistency to the investors’ attention.

New Opportunity For Mining Stocks?

He remarks that a new zeal is required to bring enthusiasm to the investors. The current market is in need of some extraordinary news. He even said that there is no lack of money in this sector and that investors just need to work upon it and create shareholder values.

Chairman McEwen commented as the prices of the gold is consistently falling since3-4 months causing damage to the mining sector. Companies like June Gold Futures and VanEck Vectors Gold Minors ETF last traded at $1,273.50/ounce, and $20.92/share respectively and the former went down 0.32% while the latter faced 0.29% fall on the day.

According to McEwen, a few companies are working in this direction to revive the interest in these mines. These companies are Kirkland Lake Gold (its record production) & Great Bear Resources (its active program of exploration) are mentioned by him in this regard.

McEwen, as per his plans, is heading for extensive drilling plans in North America. He introduced that his company is going to invest $17 million at Black Fox Property’s (North Ontario) exploration plans and $5 million at Gold Bar Mine (Nevada).

McEwen believes that such resources are full of potential and can create peerless mines in the world.

McEwen planned for the aforementioned two plans as the world saw a degradation in the production at Gold Bar due to massive snowfall at Nevada. And also, the production at Black Fox was affected as the contactor-run crushing plant was shut down for 6 weeks in February.

Growth Is The Focus

But McEwen is definite to complete its target no matter what. He said the company will fulfill its 2019 target of gold production of 205,000 ounces. In the first 3 months of 2019, he claimed the gold production of 36,166 ounces. This is 18% more than the gold production in the first 3 months of 2018.

McEwen gave a positive statement saying that price and the interest of investor will be gained back soon once the gold mines receive adequate attention. He says that the mining sector is facing a lacuna of sentiments of investors.

He even said that the importance of gold mines could be seen as unlike investors, Central Bank is showing stability in hiking the bank’s gold reserve and continuing to see it as an international currency. So, it is still important for those investors who are seeking protection for their investments.

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Stock Price Top Trending Articles On Thursday, April 25, 2019

Jon Phillip

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New Tech, Strong Management & A Cutting Edge Product

One company that could stand alone in a multi-billion dollar industry seeing incredible growth in 2019. Click Here For Full Report

The United States To Lead The 5G Connectivity Race

In the contemporary world, every succeeding decade talks about the arrival of a new G. And the recent generation of the internet which has covered the front page of several magazines is the 5G. According to the Cellular Telecommunications Industry Association, there is cutthroat competition between the United States and China. See For Yourself, Here.

This Stock is Providing Potential for Huge Opportunity within the Health Care Industry

The most recent global report from the United Nations states that by  2030 the global population will reach 8.6 billion [1]. This predicted growth in global population presents many potential problems. Some of these problems are obvious; shelter, food etc…What about Healthcare? Click Here To See One Company Taking Direct Aim At Disrupting This Market


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