IMPACT OF THE 2016 US PRESIDENTIAL ELECTION ON THE VOLATILITY OF THE US CAPITAL MARKETS

This paper examines the impact of the 2016 US Presidential Election on the volatility of theUS capital markets. In addition to the election date, we analyze seven other events that are potentiallyinfluential to the direction of the election outcome, thus affecting the reaction of the US market. Ouraim is to confirm past findings that suggest escalating volatility fluctuations surrounding an electionperiod, and whether any related events would have any impacts on the stability of the capital markets.Our result suggests that the 2016 US Presidential Election can be considered a unique case inthat the reaction of the capital markets throughout the election period and any related news isrelatively calm, and showing little signs of turbulence. We found that a 31-days event windowsurrounding an election date is the optimal window that portrays the reaction of the capital marketstoward the election.