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US Midterm Elections Loom; Prudential: Taiwan Stocks Supported by Fundamentals Despite Volatility
Finance · Investment Managers · economic_daily · 2026-11-03
As US midterm elections approach, Prudential Investment suggests that while short-term volatility is expected, Taiwan's strong fundamentals will prevail.
What Happened
Election Scenarios: The US midterm election outcomes will dictate policy direction. A split Congress would likely limit market volatility, while a Republican sweep could favor policy continuity; conversely, a Democratic sweep might pressure tech stocks due to AI regulation concerns, though it could improve long-term inflation and geopolitical risks.
Focus on Fundamentals: Prudential Investment notes that market participants are currently more focused on interest rates, corporate cash flow, and financing costs. Elections are merely short-term noise, and once uncertainties subside, corporate earnings and fundamentals will regain their role as the primary market drivers.
Taiwan Market Resilience: Although Taiwan stocks have corrected alongside global markets, their strong underlying fundamentals have limited the downside. The market is currently in a consolidation phase, and investors should monitor stabilization signs in US, Japanese, and Korean markets.
Outlook: As the elections conclude and concerns over inflation and interest rates ease, Taiwan stocks are expected to build momentum toward the end of the year and into next year. Investors are advised to remain patient, as the market is likely to return to a fundamental-driven rally once international conditions stabilize.