Stock market history is likely on the side of a surprise win in this year’s presidential election.
Market performance is struggling heading into election day. That bodes well for a presidential challenger fighting an incumbent party to take the White House.
Market decline is a dark omen for dark and dirty candidate Democrat Hillary Clinton. Her polling numbers have dropped sharply recently as the market staggers and her scandals dominate media coverage.
History shows stock market performance between July 31 and October 31, according to CNBC, has a high percentage of correctly predicting the next president and this year it’s pointing to a victory by Republican Donald Trump,
As reported on CNBC:
Sam Stovall, chief investment strategist at CFRA, says the market’s decline this fall has been a bad omen for the incumbent party and Hillary Clinton, who still holds a six point national lead in a new poll. The S&P 500 is down 2.2 percent since its close of 2,173 on July 29, a Friday and the last trading day of July.
“Going back to World War II, the S&P 500 performance between July 31 and Oct. 31 has accurately predicted a challenger victory 86 percent of the time when the stock market performance has been negative,” he said. The one time in eight that the incumbent party won with a negative stock market was in 1956, when Adlai Stevenson challenged President Dwight D. Eisenhower.
Assessment of the stock market influence on the election is as sketchy as any stock market prediction. Anything can happen, and predicting the future is simply a guess.
“This time around if the Democrats retain the White House, I will come up with two responses. One is that history is a guide but never gospel, and two, the negative performance by the market could be a reflection of the worry of domination that a Democratic sweep would bring,” said Stovall.
The election is not a historical lock for Trump by any means. Some analysts see favorability toward Clinton in the stock market numbers.
Daniel Clifton, head of policy research at Strategas, said it still looks as if Clinton will win, but the latest Clinton investigation news may affect the down-ballot Congressional races.
Clifton, too, notes that the historic guide of market performance prior to the election is not pointing to a win by the Democrat. He said when market performance over the three months leading up to election day has been negative, there has never been a victory by the incumbent party going back to 1984. So far, the S&P 500 is down about 2.5 percent since Aug. 8, three months before the election Nov. 8.
“I would say on face value it’s saying prepare to be surprised on Tuesday,” said Stovall.
Following so many October surprises negatively affecting Clinton, Trump could well be on his way to the biggest November surprise in modern history on election day.
A Trump win would send shockwaves through the biased mainstream media and all Democrats facing re-election this fall. A Trump win would force the Republican elite to stand with history and ride the upset to a position of prominence in the White House and Congress.
Trump would be draining the Washington swamp in a way never seen in American politics.