JECohen says fundamentals drive long-term market returns over political outcomes
SPY•JECohen’s analysis says corporate earnings, interest rates and economic trends matter more to long-term portfolio returns than midterm election outcomes. The federal deficit rose 12% to $1.99 trillion in fiscal 2026, while national debt surpassed $40 trillion.
1. Market drivers
JECohen’s analysis found that long-term portfolio returns depend more on corporate earnings, interest rates and economic trends than on midterm election outcomes. It said policy uncertainty could trigger short-term market volatility, but major indices have historically stabilized quickly following government shutdowns.
2. Debt and interest rates
The federal deficit rose 12% to $1.99 trillion in the fiscal year ended September 30, 2026, and national debt surpassed $40 trillion. The analysis said the $41.1 trillion statutory debt ceiling could be reached by mid-2027. The 30-year Treasury yield has remained above 5% since June, raising refinancing costs as existing government debt matures.
