As the 2020 Presidential election draws near, our attention instinctively turns to Europe – the Swedish pop-metal band, not the continent – and their mid-80s chart-topper, The Final Countdown. Now that summer is over, the final countdown to election day has begun. In this spirit, we are introducing our Election Countdown Calculator (“ECC”), a tool aimed to provide insight into which party will win The White House come November 3. The math behind the ECC is simple. Since 1928, the performance of the S&P 500 Index (S&P 500) for the three months before the Presidential election successfully “predicted” the winner of The White House 87% of the time. More specifically, when the S&P 500 is up for those three months the incumbent party tends to hold onto the White House and when the S&P 500 is down for those three months the party out of power tends to capture the White House. While we don’t know for sure if the performance of the S&P 500 and the outcome of the vote speaks to causation, correlation, or neither, the ECC is as good a tool as any to bring some predictability to an unpredictable campaign season. The ECC will be updated and incorporated into every Weekly Wire between now and Election Day. While Election Day is eight weeks away, with the S&P 500 up 4.22% since August 3, the stock market is telling us it is more likely than not that President Trump wins reelection. Finally, two points worth remembering as we all navigate these very difficult days: since Europe released The Final Countdown in 1986, our great nation has successfully held eight Presidential elections and the S&P 500 has gained 1,300%.
Tagged: weekly wire, market perspectives, Tim Holland, S&P 500 Index, Presidential election, Election Countdown Calculator