Morgan Stanley: The US presidential election may trigger severe market volatility, and investors are advised to focus on long-term strategies

Odaily Planet Daily Report: In a recent report, Morgan Stanley analysts Monica Guerra and Daniel Kohen analyzed the potential impact of the 2024 US presidential election on the market, pointing out that economic signals are mixed, and investor uncertainty is increasing. They explained that fluctuations in consumer sentiment and persistently high prices are affecting voters' views, and traditional market indicators cannot provide clear predictions of the election outcome. Despite these factors, Guerra and Kohen believe that "while political outcomes and corresponding policy changes may impact corporate profitability, business and economic cycles may be more relevant to market performance." They advise investors to focus on long-term strategies rather than reacting to election-driven market changes. The analysts warned that a delayed election result could lead to increased volatility, stating that "a delayed election result will bring a period of uncertainty and speculation, which historically has led to increased short-term market volatility." Due to the tight poll results in key swing states and the uncertain timing of mail-in ballot counting, the final result may take several days or even weeks to be revealed, potentially causing significant market turmoil. Looking ahead, Guerra and Kohen detailed that "as the campaign accelerates, proposals intensify, and the competition for swing state voters heightens, we expect the final sprint to election day to be contentious. An unexpected political event or disclosure, the so-called 'October surprise,' could have a modest impact on the election, and mail-in voting and phased counting, as well as the intensity of the competition, could leave the election result in limbo for some time, exacerbating market volatility." ()