Biden or Trump? The bull market doesn’t care, this money manager says

September may have been a poor month in the markets but there’s no doubting we’re in an economic recovery, says WealthWise Financial’s Loreen Gilbert, who thinks even election kerfuffles in the United States won’t kill the strong momentum going into 2021.

It’s certainly been a September to forget, as markets pulled back after a tremendous recovery stretching back to April, one which saw indices recoup losses during the early days of COVID-19 and then some.

But September was a month of reckoning, with the S&P 500 now down five per cent and the NASDAQ down six per cent for the month. Canada’s S&P/TSX Composite Index dropped just two per cent.

For the year, the tech-heavy NASDAQ is still up plenty, putting on a huge 18 per cent since the start of the year, while the S&P 500 is now about even for the year and the S&P/TSX Composite is down five per cent.

Governments worldwide continue to battle a second wave of the COVID-19 pandemic, and with the promise of safe and effective vaccines still months if not years away and many countries facing record high unemployment — not to mention worries over a potentially contested US election in November —the market mood would be forgiven for remaining somber in tone for the foreseeable future.

But the signs are actually pointing otherwise, said Gilbert, CEO of WealthWise, who referred to a just-released survey from the Conference Board which found consumer confidence jumped in September to its highest since the start of the pandemic.

“You can’t fight the train that’s already in motion and that is that we’re in a recovery,” said Gilbert, speaking on CNBC on Tuesday. “And when we look at the numbers coming out even today where consumer confidence beat expectations, I think we have to say that we’re fully in recovery.”

“More recently we’re also talking about a new stimulus package, so even though that has been a contentious debate between both sides, whether we get the stimulus package before the election or after the election that will also help the market,” Gilbert said.

And while the outcome of the US Presidential election may impact the market to some degree, chances are it’ll be short-lived, as history doesn’t support the idea of a lasting positive or negative effect on markets.

Instead, what may have an effect is uncertainty surrounding election results, a distinct possibility as some in both the Democrat and Republican camps have threatened to not accept the vote if the other side wins.

Gilbert is less convinced that’ll be a problem, either.

“There’s a lot of talk about a contested election [but] let’s just remember that our elections have always seen that we did not have voter fraud and that we’ve had a peaceful transition from one regime to the next. Both of those are questionable this year and with that, there is a lot of talk of a contested election,” Gilbert said.

“However, I don’t think it’s going to be as significant as the pundits are saying and I do think that we will have an answer, hopefully, going into December,” she said. “If that were not the case, yes, there could be some additional market volatility [but] I would still say we’re in a bull market run.”