Competing Signals: Markets Ahead of the Midterms
WashingtonWise | EP145
Competing Signals: Markets Ahead of the Midterms
History tells us that markets are usually flat in the run-up to midterm elections. Can strong earnings continue to power the market through the election and beyond? On this episode, host Mike Townsend is joined by Joe Mazzola, Schwab's head trading and derivatives strategist, for a conversation about whether history still offers a useful guide to a market that has repeatedly defied it in 2026. Joe shares how an unusually strong earnings backdrop—with revenue, profit, and margin growth rising together—has powered the rally, and why a higher bar for future results could make those gains harder to repeat. He also unpacks how turmoil in the bond market is impacting equities and how the market is thinking about a possible Fed rate hike. And he shares practical approaches investors can consider to manage short-term volatility heading into the election and where investors seeking genuine diversification might look for opportunities.
Mike also provides his thoughts on the latest developments in Washington, including a preview of next week's Fed meeting, how Congress has staved off—for now—a government shutdown, and the implications of the national debt passing the $40 trillion mark.
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