Historical Stock Trends and Their Impact on Presidential Elections

  • Stock market performance in the three months before Election Day is indicative of presidential outcomes
  • Since 1928, the incumbent party has won when the S&P 500 was positive during this period 80% of the time
  • When the market fell during the three months leading up to an election, the incumbent party lost eight out of nine times
  • Historically, stocks have performed well in the months leading up to a presidential election
  • Dow Jones Industrial Average has risen in the June-October period 72% of the time since its creation

A recent analysis by Adam Turnquist, chief technical analyst at LPL Financial, suggests that the stock market’s performance in the three months leading up to the U.S. presidential election can be a predictive factor for the outcome. Since 1928, when the S&P 500 was positive during this period, the incumbent party has won 80% of the time. Conversely, when the market fell, the incumbent lost eight out of nine times. The Dow Jones Industrial Average has risen in the June-October period 72% of the time since its creation.

Factuality Level: 8
Factuality Justification: The article provides accurate and objective information about the historical performance of the stock market in the months leading up to a presidential election and how it may potentially affect the outcome. It cites sources and presents data to support its claims. However, it does not claim that the stock market is the sole determinant of an election’s result, acknowledging other factors like polls and betting odds also play a role.
Noise Level: 6
Noise Justification: The article provides some relevant information about the historical relationship between stock market performance and presidential elections, but it also includes speculation and potential noise in the form of predictions about the upcoming U.S. presidential election outcome based on market performance. While it does not dive into unrelated territories, it could benefit from more scientific rigor and intellectual honesty by acknowledging that historical trends may not necessarily predict future outcomes.
Public Companies: LPL Financial (LPLA), S&P 500 (SPX), Dow Jones Industrial Average (DJIA)
Key People: Adam Turnquist (Chief Technical Analyst at LPL Financial)

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Financial Relevance: Yes
Financial Markets Impacted: U.S. stock market
Financial Rating Justification: The article discusses the potential impact of the U.S. stock market’s performance on the upcoming presidential election and its historical correlation with incumbent party outcomes, which could affect financial markets and companies.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the text.

Reported publicly: www.marketwatch.com