John Others wrote that the poor record of the Republican Party in the midterm elections triggered a negative reaction in the global market, but the market was clearly divided. Of the 11 major industry sectors in the S&P 500 index, 5 sectors closed higher last week; only two sectors, technology and energy, fell sharply. The next two years are full of uncertainty, and the 2028 general election is now even harder to predict. However, the Federal Reserve's policy path remains unchanged, and the possibility of a drastic shift in fiscal policy is very low. Even if the Democratic Party intends to introduce regulatory rules that are bad for businesses, they will be held back by Trump's veto power. At the same time, the overall results for the third quarter disclosed by many companies are still impressive; only a few companies fell short of the optimistic expectations of the market. The current 12-month mixed expected price-earnings ratio of the Nasdaq 100 Index has returned to its high level since the worst period of the COVID-19 pandemic. Unless the political risk worsens substantially, the current position may be a potential bottom. Risks mainly focus on two potential impacts of the midterm elections: the construction of AI data centers may be blocked, and the Iran conflict may come to an end sooner.

John Others wrote that the poor record of the Republican Party in the midterm elections triggered a negative reaction in the global market, but the market was clearly divided. Of the 11 major industry sectors in the S&P 500 index, 5 sectors closed higher last week; only two sectors, technology and energy, fell sharply. The next two years are full of uncertainty, and the 2028 general election is now even harder to predict. However, the Federal Reserve's policy path remains unchanged, and the possibility of a drastic shift in fiscal policy is very low. Even if the Democratic Party intends to introduce regulatory rules that are unfavorable to businesses, they will be held back by Trump's veto power. At the same time, the overall results for the third quarter disclosed by many companies are still impressive; only a few companies fell short of the optimistic expectations of the market. The current 12-month mixed expected price-earnings ratio of the Nasdaq 100 Index has returned to its high level since the worst period of the COVID-19 pandemic. Unless the political risk worsens substantially, the current position may be a potential bottom. Risks mainly focus on two potential impacts of the midterm elections: the construction of AI data centers may be blocked, and the Iran conflict may come to an end sooner.