The stock market is often seen as an accurate predictor of the Presidential election.
Stock price trends this election season are clear.
And they point in the direction of this candidate winning the election.
Since World War II, negative stock market performances between July 31st and October 31st have predicted a challenger victory 86% of the time.
If stocks are declining in value, Americans economic anxieties increase.
When financial turmoil engulfs the U.S. economy, voters take it out on the party in power.
And since Hillary Clinton is the Democrat nominee, she would be viewed as the “in power” candidate.
That does not bode well for her fortunes.
“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.
Stovall said in that year, Britain and France joined with Israel in a military action against Egypt over the Suez Canal. It was also the year of the Hungarian Revolution.
“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 market had been concerned about the possibility that Democrats would take the House of Representatives, but on Monday, after new revelations about an FBI probe into emails of a Clinton staffer, those worries were pushed into the background.
Stovall said when the market has been higher in the same period, the incumbent party won 82 percent of the time since World War II. The exceptions have been 1968, when there was a third-party challenger, George Wallace, and in 1980, when the third-party candidate was John Anderson. Gary Johnson is the third-party Libertarian candidate this year.”
Polls have been following the market trends.
Nationally, Trump has cut Clinton’s lead from a high of nearly 7 points in the Real Clear Politics average, to just 2.
And he’s overtaken her in the ABC/Washington Post poll, despite trailing by 12 points on the survey’s first day.
He now leads her by 1 point and has been steadily surging ever since FBI Director Comey’s announcement to reopen the investigation into Hillary Clinton’s private email server.
On-the-ground early voting has also shown promise for the GOP ticket.
Early voting is down in the four largest Democrat counties in Ohio.
And Republicans have reversed the Democrats early vote lead in Florida from 2012 to holding a slight advantage.
More encouraging polls emerged from North Carolina, where a Survey USA poll found Trump reversing a 2 point Clinton lead in their previous survey, to a 7 point lead in their latest poll.
With just days remaining in the campaign, the stock market and the polls are pointing to a strong Trump performance on election night.
Do you agree?
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