Stocks Predict Presidential Elections @ 88%
Business Insider featured a similar graph as its Chart of the Day on Monday (ht/Craig Newmark), and also linked to this article about the relationship between the stock market and presidential elections, featuring Sam Stovall, chief investment strategist for Standard & Poor's Equity Research Services, who wrote this in a recent S&P newsletter:
"The S&P 500's price performance during the three calendar months leading up to the presidential election has been a good predictor of whether the president or his party would be re-elected or replaced. An S&P 500 price rise from July 31 through October 31 traditionally has predicted the reelection of the incumbent person or party, while a price decline during this period has pointed to a replacement. Since 1948, this election-prognostication technique did an excellent job, in our view, recording an 88% accuracy rate in predicting the re-election of the party in power (it failed in 1968).