The stock market’s “Presidential Predictor” correctly called the winner of the last nine presidential races, and this year says Joe Biden will emerge victorious on November 3.
As MarketWatch noted, the “Presidential Predictor” tracks the S&P 500 index for its performance between July 31 to October 31 just before every election. If the index has gone up between that time, it means a victory for the incumbent party, while a drop means that the party not holding the White House will win. The predictor has been pushed by Sam Stovall, CFRA’s chief investment strategist.
The prediction came down to the wire this year, going into the final market day of October nearly tied before losses on Friday tilted the prediction to Biden. The index finished the day down 40.15 points, leading to a narrow deficit for the time period — ending at 3,269.96 after having closed July 31 at 3,271.12.
According to the report, the model has been correct in most races, though it missed in 1956 when Republican President Dwight Eisenhower earned re-election despite a negative performance for the S&P 500 in the final months before Election Day. It also failed in 1968 and 1980, when Presidents Richard Nixon and Ronald Reagan both won despite down performances.
But, as MarketWatch reported, Stovall said there were more significant circumstances in these races that eclipsed the S&P 500 performance.
“The 1956 stock-market weakness was tied to the Suez Crisis, following Egyptian President Gamal Abdel Nasser’s decision to nationalize the Suez Canal, and the Hungarian Uprising, which was crushed by Soviet troops, amplifying Cold War tensions,” the report pointed out.
“The 1968 election, despite the buoyant stock market, was dominated by the Vietnam War, while the Iran hostage crisis was a key issue in the 1980 election.”
Stovall said this year’s weak economic state is fueled by a surge in coronavirus cases and the prospect that the pandemic will continue to dampen the economy.
As The Inquisitr reported, there are some other unusual indicators pointing to a Biden victory. One is a complicated system created by American University political science professor Allan Lichtman. He created a model studying a range of societal, economic, and political factors to determine which party will take the White House, and said Biden was on track to come out ahead in this race.
Traditional polls seem to concur, showing the Democratic candidate leading nationally and ahead of Donald Trump in a series of key battleground states. That includes leads in longtime Republican strongholds such as Georgia and Texas.