Chart of the Week
Today we look back at the last 60 years of presidential elections and how the market performed.
While we wish there was a profitable way to invest based on the election, our analysis could not find one.
Knowing which party wins in advance does not provide a profitable information edge. The good news is that, over the long-term the market has gone up, regardless of which party wins. American businesses are dynamic and resilient.
The pattern generally held that markets bottomed in the weeks leading up to the election and continued to rise in the following weeks, regardless of the party in power. Even in close and contested elections, the average performance of the S&P 500 was positive. Of course, these are averages and there is always a possibility of price risk and volatility. However, these have proven to be opportunities for investors with a process.
What We’re Reading
The New Normal of Negativity – Wealth of Common Sense
Fade the Election – Richard Bernstein Advisors
Consumer Checkpoint: Will home equity get tapped? – Bank of America
Podcast of the Week
Why Mortgage Rates Went Up After the Fed’s Big Cut – Odd Lots, Bloomberg
Last Week
Earnings season started with 31% of companies in the S&P 500 reporting. Earnings are up by 3% and beating analysts’ estimates by 6%. These are solid fundamentals considering the strong earnings growth already in 2024. Manufacturing data continues to be sluggish, while services are carrying the weight. Housing is a mixed bag, and consumer confidence surprised on the upside this month.
The Week Ahead
Inflation data and the monthly jobs report will be key inputs before this weekend. Economists forecast 115,000 jobs created in October. Services and manufacturing data will also be coming out soon. The Fed meets two days after the election on Thursday, November 7th. Markets expect a quarter percent interest rate cut at this meeting and the next meeting in December.
Thank you for reading.
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