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2026-11-05 22:12:26
[Guotai Haitong: Logically, a partitioned government after the midterm elections is beneficial to US Treasuries, while the trends of US stocks, the US dollar, and gold are relatively uncertain] Guotai Haitong released a research report pointing out that, logically, a partitioned government after the midterm elections is beneficial to US Treasuries, while the trends of US stocks, the US dollar, and gold are relatively uncertain. Historically, partitioned governments have benefited US Treasuries, US technology stocks, and the US dollar, while gold's gains have been relatively narrower. For US Treasuries, after the midterm elections, fiscal expansion under a partitioned government may be relatively restrained, and concerns about economic expectations and fiscal sustainability will decrease, thus providing some positive impetus for US Treasury yields. For US stocks, there are both positive impetus from loose liquidity and policy stability brought about by partition, and negative impetus from declining economic momentum and increased risk of government shutdown. For the US dollar, slower economic growth and narrowing interest rate differentials between the US and other countries will suppress the dollar, but decreased concerns about fiscal sustainability will lead to a relatively stronger dollar. For gold, loose liquidity under a partitioned government is beneficial to gold, but increased policy stability reduces the demand for gold as a safe haven, which is negative for gold; therefore, it is a case of both positive and negative factors. However, a review of market performance from 2000 to 2025 shows that a divided government would benefit US Treasury bonds, US tech stocks, and the US dollar, while gold's gains would be relatively smaller.
