So while there was an element of buy the rumour and sell the fact around Obama’s victory, ultimately the fact that the outcome was known was good. Funny that, because I seem to recall that back in 2000, when we had the hanging chard debacle, the equity markets were not bothered.
A friend at BNP Paribas sent me a nice graphic showing how the dollar, US equities and fixed income have performed under the various US presidents since 1976. I’m not sure what it means, but it seems that equities have performed better under a Democrat president than a Republican one. This would suggest that bonds do better under Republicans, but it’s not entirely clear. As for the dollar, who knows?
Source: BNP Paribas FX Strategy