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

    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.

    Culture wars: Hollywood mogul outed as serial sexual predator

    Hollywood's top globalist propagandist Harvey Weinstein, has been exposed not only as a serial sexual predator, but also as someone with a deceitful and duplicitous media in tow.

    Dawkins, other prominent leftists express contempt for Vegas victims

    The evolutionary biologist and atheist Richard Dawkins tweeted his contempt for white Americans and the Second Amendment of the US Constitution after learning about the mass shooting in Las Vegas.

    How stupid are American Democratic lawmakers?

    WashingtonThree Democrats from the House of Representatives have sent a letter to the US Federal Communications Commission (FCC) demanding an investigation into Sputnik Radio, "used as part of the Kremlin’s effort to influence the 2016 presidential election".

    Trump-DACA deal ‘biggest amnesty in American history’

    WashingtonFox News host Tucker Carlson warned on Thursday night that the Trump-DACA deal with Democrats will be the "biggest amnesty in American history". Worse still, president Trump will get nothing in return, Carlson said.

    California lawmakers introduce bill enabling the spread of HIV

    San Francisco Democratic Senator Scott Wiener is working full time to make infecting others with HIV, a minor transgression. Those who knowingly spread HIV may in future only face a misdemeanor charge.

    US Air Force sends out sprayer aircraft in wake of hurricane Harvey

    The Pentagon has dispatched C-130H Sprayers from the Air Force Reserve’s 910th Airlift Wing residing in Youngstown, Ohio to Texas in the wake of Hurricane Harvey.

    Go to archive