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.

    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.


    Cancer-linked weedkiller found in almost all US children’s cereal

    American breakfast foods aimed at children contain a cancer-linked herbicide. Called Roundup by Monsanto, the weedkiller has been found in 43 products including granola, snack bars and Cheerios.

    Antifa attack on NBC reporter in Charlottesville censored

    NBC News has completely ignored the significant event of their own reporter and news crew being attacked in the streets of Charlottesville by Antifa marchers on Saturday.

    Internet censorship intensifies against conservatives

    Silicon Valley's political censorship of conservatives continues to intensify as accounts linked to the Ron Paul Institute were suspended by Twitter in addition to Tommy Robinson and his supporters being banned by Instagram.

    Portland police charge Antifa at Patriot Prayer rally

    PortlandDuring a conservative Patriot Prayer in Portland, Oregon, on Saturday, marchers were attacked by Antifa supporters who had been openly mobilising for violence against a lawful rally. Then police moved in.

    Bombshell: US intelligence aided Russian criminal to funnel funds to Hillary

    Russian President Vladimir Putin accused Hillary Clinton of conducting criminal activities in his country because she accepted more than $400 million from nefarious sources.

    Antifa attacks Christian Patriot Prayer rally in Oregon

    PortlandA peaceful public prayer meeting scheduled in the US city of Portland, Oregon on Saturday afternoon ended with violence against a conservative prayer group. Commentators have called it a "low-level civil war".

    Trump to expose anti-Russian Mueller’s role in 9/11 cover-up

    WashingtonPresident Trump is going after former FBI director Robert Mueller by exposing his role in helping to cover-up Saudi Arabia’s role in 9/11.

    Congresswoman incites violence against Trump officials

    WashingtonThe US Department of Homeland Security has noted a "sharp increase in the overall number of general threats" directed towards their employees over President Trump's immigration policy after Democratic Congresswoman Maxine Waters decided to pour gasoline on a race fire.

    ‘Migrant child crisis’ in US a fabrication based on lies

    The mainstream media in the US has fabricated a "migrant child crisis" to stop President Donald Trump from erecting a wall on the country's southern border. And its not based on factual information.

    ‘US may be wrong on number of Russian nuclear warheads’

    US calculations of the number of nuclear warheads stored in Russia may be wrong by an order of thousands, said former Secretary of Defense William Perry. Washington does not have accurate information about it, he says.

    Go to archive