Stock Market Warms to Likely Obama Presidency
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Date: November 04, 2008 04:30PM
Election Rally: History Suggests Democrats Better for Stocks
Posted Nov 04, 2008 by Aaron Task in Investing, Newsmakers
The stock market was rallying strongly midday, on track for its biggest election day rally since 1984, Bloomberg reports.
As the market continues its week-long advance, some argue this is evidence of the market warming up to a likely Obama Presidency, while others claim it's merely a snapback from deeply oversold conditions probably.
The answer is probably some combination of the two but, regardless of where you sit on the political spectrum, history shows the stock market fares better under Democratic Presidents vs. their Republican counterparts.
Since 1901, the S&P rose an average 7.2% under Democratic presidents vs. 3.2% under Republicans, according to Ned Davis Research.
Out of the 10 years of negative stocks performance since 1970, 7 occurred during a Republican-controlled White House versus three under Democrat control, according to Ashraf Laidi of CMC Markets U.S.
In the last seven periods when Democrats had complete control of U.S. political power, the S&P 500 rose 14.7% percent on average, according to Bespoke Investment Group.
In the eight times a Republican was president and Democrats controlled Congress, the benchmark index rose 7.4%.
Still, the notion that "gridlock is good" is also borne out, at least in relatively recent history. Of the 28 years of positive stock performance since 1970, 19 occurred during partisan control between the White House and Congress, according to Laidi.
Just some stats (vs. opinions) to keep in mind as you go to the polls and watch the election returns tonight. That said, it's fair to say the current economic environment "really is different" than past election cycles.