Skip to Content

Federal Reserve Bank, NY. Wiki

S&P 500 best predictor of US presidential race

One of the institutions with the best track record in calling presidential races, is the US stock market. The signals it is currently emitting should be of some concern to Democrat Hillary Clinton.

Published: November 2, 2016, 6:02 pm

    New York

    The performance of the S&P 500 Index has predicted the outcome of every presidential election since 1984, according to an analysis by Strategas Research Partners LLC.

    As Bloomberg reports, an increase in the benchmark for American equity in the three months prior to the vote, has seen the incumbent party – in this case the Dems – win 86 percent of the time since 1928. Right now, the benchmark gauge is down 3.6 percent since Aug. 8 with voting starting in a week.

    Aside from the three-month interval, the S&P 500 fell on Tuesday by the most in three weeks, slipping for a sixth day to 2,111.72, making its first foray below 2,100 since July 7 before rebounding. It represents the longest slide since August 2015 amid polls showing the race for the White House narrowing, and augurs well for Donald Trump.

    The banking sector is also the industry most closely tied to the election and favors Trump, according to analysis by Bloomberg. The S&P 500 Investment Banking and Brokerage index has rallied 13 percent in the last three months.

    The CBOE Volatility Index moved sharply on Tuesday by an increase of 9 percent to the highest level since June 27.

    The stock market’s prescience is derived from the fact that it is a gauge of the economy Thus falling shares potentially indicate consumer discontent, a sentiment favouring a challenger or outsider.

    While this year’s signal ranks historically with the weaker ones, it comes amid sluggish growth in gross domestic product, right on the heels of the biggest monthly retreat in consumer confidence in a year.

    But the stimulus applied by the Federal Reserve might have rendered stocks a less reliable signal of economic health than they were in the past.

    In June, when stocks around the world spiked prior to the Brexit referendum, the outcome resulted in a mini crash of sorts, the most it fell in five years, when voters chose to leave the EU. Clinton’s lead has shrunk since news Friday that her emails are again the subject of interest to the FBI, and anxiety has soared.

    US equities led a selloff in riskier assets Tuesday following an ABC News/Washington Post tracking poll that showed Trump with 46 percent support to Clinton’s 45 percent.

    Gold also felt the political heat and surged more than 1 percent, with the dollar weakening against the Swiss franc and Mexico’s peso, considered an inverse proxy for Trump’s election fortunes, tumbled.

    Real estate and utility stocks slid more than 1.7 percent. Apple Inc. dropped 2.1 percent to weigh down the technology group, and Pfizer Inc. lost 2 percent as its quarterly profit fell short of estimates. The Dow Jones Industrial Average lost 105.25 points, or 0.6 percent, to 18,037.17, according to Bloomberg.

    karin@praag.org

    Keep ​your language polite​. Readers from many different countries visit and contribute to Free West Media and we must therefore obey the rules in​,​ for example​, ​Germany. Illegal content will be deleted.

    If you have been approved to post comments without preview from FWM, you are responsible for violation​s​ of​ any​ law. This means that FWM may be forced to cooperate with authorities in a possible crime investigation.

    If your comments are subject to preview ​by FWM, please be patient. We continually review comments but depending on the time of day it can take up to several hours before your comment is reviewed.

    We reserve the right to del​ete​ comments that are offensive, contain slander or foul language, or are irrelevant to the discussion.

    Americas

    American Psychiatric Association warns against ‘diagnosing’ Trump

    American Psychiatric Association has warned leftist psychiatrists to stop "diagnosing" President Trump without a medical examination, as it represents a total violation of medical ethics.

    ‘Consensus’ on climate science takes a hit in 2017

    Climate change research for 2017 revealed that the alleged "consensus'" on the so-called dangers of anthropogenic global warming has not yet been established as far as all climate scientists are concerned.

    Lawsuit likely to reveal the bizarre and disturbing culture inside Google

    Santa ClaraJames Damore, an employee fired from Google for circulating a memo critical of feminism and their diversity initiatives, has filed a discrimination lawsuit against the company in California.

    Antifa implicated in deadly Amtrak train derailment

    Authorities believe a track obstruction could have been the cause of the deadly Amtrak train derailment in Washington state. Footage from two weeks ago show a fracking protest on the railroad tracks.

    Only 31 percent of Americans back Jerusalem as Israeli capital

    US President Donald Trump signed a declaration earlier this week officially announcing his intention to relocate the American embassy to Jerusalem from Tel Aviv. But his choice is not popular with Americans.

    US refugee admission signals drop as Trump pulls out of UN migration initiative

    Refugee admissions to the United States were down 83 percent in the first two months of the fiscal year for 2018 - October and November - compared to the first two months of of the previous fiscal year 2017.

    Democratic Party in the US disintegrating

    Former Democratic National Committee (DNC) Chair Donna Brazile has charged the Clinton campaign of essentially rigging the 2016 primaries as well as being responsible for a staffer's murder before the election.

    Twitter’s suspension of Trump account raises serious questions

    President Donald Trump's personal Twitter account was shut down on Thursday after a disgruntled Twitter employee had deactivated the account the company said. But does Twitter's explanation make sense?

    US Air Force preparing to put nuclear-armed bombers on alert

    The US Air Force at Barksdale Air Fore Base, near Bossier City, Louisiana — is preparing to put nuclear-armed bombers back on 24-hour ready alert, a status not seen since the Cold War ended in 1991.

    Fake news beyond the headlines

    Mainstream media news content does no longer contain anything relevant beyond the screaming headlines designed to generate clicks.

    Go to archive