What occurred subsequent? The incumbent occasion misplaced. When Obama was re-elected, stocks had been rising, however when he took the White Home from the Republicans in 2008 they’d crashed within the three months earlier than the election. The truth is, the final time the S&P 500 didn’t name the outcome appropriately was in 1980, when Ronald Reagan received in opposition to Jimmy Carter regardless that equities had been up by 7pc within the previous months.
Earlier than that, the rule didn’t work for Richard Nixon’s victory in 1968, and Dwight Eisenhower’s re-election in 1956. However that’s it. For each different contest since Herbert Hoover’s victory in 1928 (after a 13.6pc rise within the index, in case your reminiscence doesn’t stretch again fairly that far) it has held good.
That, in fact, is telling us one thing in regards to the 2020 race. Week after week, the market retains hitting document highs. The S&P 500 is inside a whisker of a contemporary document, and is already up considerably for the reason that begin of August. The tech-heavy Nasdaq is on a rampant bull run.
In fact, loads may change within the subsequent couple of months. There are many causes to worry a correction. That stated, equities have already taken Covid-19, lockdown and a deep recession of their stride, and recovered. It’s arduous to think about what may depend as dangerous information in any case that.