Markets seem unstoppable – but history is about mean reversions; usually through a deep correction or damaging crash. Storm clouds are on the horizon as the US election presages a period of inclement uncertain conditions. The next 4 years will be “interesting”, but let’s get through the next 4 potentially volatile months first. 

The UK election will contain few surprises but leaves the new government massive problems to solve. Biden’s inevitable withdrawal from the US Presidential race adds new uncertainty to the political mix – and may obscure some the critical economic issues.

At a time when markets crave stability and uncertainty, the political picture looks increasingly messy. No problem. These things have a habit of resolving themselves faster than we expect. Bear my mantra in mind: “Markets are never as bad as we fear, but seldom as good as we hope.”

The US Presidential Election is the most important market/political event this year – but boils down to how a mere 170,000 Americans in key states and demographies will vote on Nov 5th. What they are thinking on the day will determine how markets play out. Understanding the election mechanics is key to spotting the opportunities.

The US Primaries confirm its likely to be Biden vs Trump. While short-term markets don’t really care, it’s going to be a massive distraction and noise for investors deeply concerned at the future. While everyone else is panicked – that’s when opportunities emerge!

Who wins from atrocity in Gaza? UK wages are still rising, but the threat is no longer wage spiral inflation, but job losses and a crash landing as the lag effects of rates rises, inflation and consumer spending create a perfect slough of despond.

Biden’s trip to Israel and Jordan vs Putin’s to Beijing - which will prove more meaningful? Meanwhile, Italy’s latest tax cuts and spending plans mimic the Trusterf*ck, but Meloni seems to have got away with it – for how long?

Are global economies heading for a soft or crash landing? Why the Republicans seeking to impeach President Biden have just played a brilliant short-term political hand, and what the ARM IPO tells us about gullibility in bubble times.

Last night’s US local elections threw out some interesting signals as to where gridlock, polarisation and the apparent decay of American Democracy are headed next. Its maybe not all as bad as we fear, but the outlook remains risky!

Markets are priced for perfection in a very imperfect world. As stocks hit new highs, are the bulls or bears correct? Politics are likely to be the major influence on where we go next, but lurking around the next corner might just be inflation.