– This is the script of CNBC's news report for China's CCTV on July 28, Thursday.
Welcome to CNBC Business Daily, I'm Qian Chen.
The Democratic Party just finished their 3rd day of DNC. After wrestling with a multitude of thorny issues this year, investors finally are getting around to thinking about the presidential election.
Surveys from multiple Wall Street firms show growing concern over how the race between nominees Hillary Clinton and Donald Trump will play out.
A few things that this election could have an impact on.
First of all, Fed's rate decisions.
The Federal Reserve on Wednesday opted not to raise interest rates, and according to several experts, the central bank missed its moment to do so long ago.
Fed policymakers said on Wednesday near-term risks to the economy had diminished and their latest forecasts, from June, see roughly two hikes this year with three policy meetings scheduled to the end of 2016.
But with a November move seen as highly unlikely, given that the central bank's meeting that month comes just a week before the presidential election, economists say the Fed could be rushed into hiking in September or, more likely, wait until December.
Traders now see a 46.3% chance of a rate hike in December, up from 41% before the policy statement was released, said John Canally, chief economic strategist at LPL Financial. Odds had briefly topped 50% before sliding back. Markets don't fully price in a rate hike until March of 2017.
Will holding rates furthur contribute to the stock rally? An interesting historical data here -
There have been 22 elections since the S&P 500 Index began. In these election years:
18 of the 22 years (82%) provided positive performance
When a Democrat was in office and a new Democrat was elected, the total return for the year averaged 11.0%
When a Democrat was in office and a Republican was elected, the total return for the year averaged 13.2%
Meanwhile, on the economic data front, fundamentals are looking fine.
The number of Americans filing for unemployment benefits unexpectedly fell last week, hitting a three-month low as the labor market continues to gather momentum.
Labor market strength, characterized by the very low layoffs and solid pace of hiring, is boosting consumer spending, which in turn is providing a lift to economic growth.
On the property market, the S&P CoreLogic Case-Shiller 20-City Composite index rose 5.2 percent year over year
Still, home-price appreciation continues throughout much of the United States, David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices, said in a statement.
"Overall, housing is doing quite well. In addition to strong prices, sales of existing homes reached the highest monthly level since 2007 as construction of new homes showed continuing gains," he said.
There's still some time before November, but markets started to worry what's gonna happen after the election.
The market has downside risk the rest of the year due to uncertainty over the presidential election and Donald Trump's populist economic plan, according to HSBC Global Research.
"This could depress investment and boost equity volatility. Simplified U.S. electoral scenarios all show downside to U.S. equities by year-end," wrote HSBC's chief U.S. economist Kevin Logan.
CNBC's Qian Chen, reporting from Singapore.
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