S&P 500 Predicts Donald Trump Will Win the Election
A number of polls and prognosticators, with FiveThirtyEight at the forefront, say Hillary Clinton will defeat Donald Trump on Nov. 8.
But there’s one indicator that bucks the trend.
The S&P 500 stock market index says that Trump, a Republican, has an 86 percent chance of winning the election on Tuesday. The indicator has been accurate 86.4 percent of the time since 1928, and the last time it was incorrect was in 1980 when Ronald Reagan won. It’s been accurate every time since 1984.
Both CNBC and Bloomberg said last week that the decline in the stock market doesn’t bode well for Clinton, the Democratic nominee.
“Going back to World War II, the S&P 500 performance between July 31 and October 31 has accurately predicted a challenger victory 86% of the time when the stock market performance has been negative,” Sam Stovall, the chief investment strategist at CFRA, told CNBC.
If stocks go up, the incumbent party—that is, at this time, Democrats—tend to win the White House. The S&P has been down 3.2 percent since Aug. 8, which is a good sign for Trump, Bloomberg reported.
“This time around if the Democrats retain the White House, I will come up with two responses,” Stovall added to CNBC. “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.”
But Marketwatch noted that the economy has generated an average of 181,000 new jobs a month in 2016. And the last time a party controlling the White House lost the election was in 1976 when Jimmy Carter defeated Gerald Ford.