A look back at November 2000
At the end of September, I wrote about the seasonal pattern in equities ahead of a US election. The trend was for weakness and that's exactly what happened as the S&P 500 had its worst month since March.
Looking at the trend in markets after the vote, it's mixed and that undoubtedly emphasizes different election outcomes and things that were going on in the world at the time. The year that stands out is 2000 and it's worth taking a look at the chart today.
The Bush-Gore election was razor thin and resulted in early a month of uncertainty before George W Bush became President.
How did the market like it? The S&P 500 fell 8.01% in November 2000. From the morning after the election to the December low the drop was 12.5%.
The FX market didn't behave how you might expect given the drop in equities. USD/JPY went on an impressive run from election night through year-end.
The euro was in its infancy then but drifted modestly lower for two weeks after the election before running 10 cents higher from late-November to year-end. There were other huge moves as well as USD/CHF fell to 1.61 at year end from 1.78 on election night.
