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

    Trump advisor Bolton coordinated US strike on Syria with Israel

    WashingtonIsraeli media reported that John Bolton spoke with his Israeli counterpart, Meir Ben Shabbat, to coordinate the US-led attack on Syria early on Saturday morning.

    Trump vows to bomb Syria – Russia threatens retaliation

    In a tweet today, United States President Donald Trump said that Russia vows to shoot down missiles targeting Syria and comments: “Get ready Russia, because they will be coming”. Military experts now talk about a situation more explosive than the Cuban Crisis of 1962. The geopolitical analyst Manuel Ochsenreiter tells FWM that the harsh rhetoric in any case has destroyed the diplomatic mechanisms that helped prevent escalation during the Cold War.

    Trump calls Black Caucus member ‘low-IQ individual’

    President Trump has described a Congressional Black Caucus member as a "low-IQ individual". The US president spoke at a campaign rally for Pennsylvania special House election candidate Rick Saccone.

    Half of new Democratic hopefuls are former CIA or other operatives

    WashingtonThe Democratic Party in the United States is looking to capture a majority in the House of Representatives in the 2018 midterm elections. But as many as half of their new representatives will be former CIA and other intelligence operatives.

    YouTube uses extremist non-profit SPLC to go after conservatives

    Somali-born Dutch-American activist Ayaan Hirsi Ali is a leading voice for the reformation of Islam. The far-left Southern Poverty Law Center has now labeled her an "anti-Muslim extremist" because she is an advocate for women’s rights in Islam.

    Marion Maréchal-Le Pen: ‘France is no longer free’

    WashingtonYoung French politician Marion Maréchal-Le Pen spoke at the leading American conservative conference outside Washington DC on Thursday, as anti-globalism continues to rise across Europe.

    ‘Kremlin trolling monitor’ a scam says Dutch expert

    The HagueSybrand Buma, the chairman of the CDA in the Lower House, told Dutch news service WNL in January that "Russian trolls" want to cause unrest in the Netherlands via Twitter. Buma claimed they did so during a debate in the House of Representatives. His claim turned out to be rubbish.

    The total implosion of CNN’s anti-conservative news

    Cable’s waning news network giant CNN, has seen its viewership drop by nearly a third during peak-watching hours compared to last year and by almost a quarter during the day.

    Media ignore Big Pharma angle after Florida mass shooting

    The mainstream media has not questioned how serotonin reuptake inhibitors (SSRI) or drugs may be linked to mass shootings given that they are funded by Big Pharma ad revenue.

    Viewer stats crash for Winter Olympic Games without Russia

    Viewer numbers will not even earn the opening of the Olympic Games franchise a bronze medal. It is down 9 percent from what the February 7, 2014 Opening Ceremony of the XXII Winter Olympics from Sochi in Russia delivered in the early numbers.

    Go to archive