How do midterm elections affect the market? In its latest report, Citigroup mapped all midterm elections since 1960 onto a single timeline to analyze trends in equities, interest rates, credit, gold, and sector rotation. In simple terms: About 50 trading days before the election, risk premiums often begin to rise; a divided government (where the opposition party gains control of at least one chamber) is the baseline scenario. Citigroup has broken down the coming months into a trading clock, with November 3 as T0: First phase (T-60 to T-30): Risk premiums rise, equities tend to pull back, and implied volatility gradually increases; Second phase (T-30 to election day): As event risk becomes fully priced in, equities may pre-emptively rebound, and volatility often peaks about one month before the election; Third phase (election day to T+50): If a divided government materializes, the fiscal constraint logic for U.S. Treasuries is most likely confirmed; meanwhile, defensive factors that outperformed before the election may begin to lose momentum; Fourth phase (T+50 to T+100): Growth factors, technology, and cyclical sectors like industrials are more likely to enter a recovery phase. Historically, technology has been the clearest relative winner post-election, followed by industrials; defensive sectors such as healthcare, consumer staples, and utilities tend to underperform. Will this cycle follow the same pattern? 🤔