Is President Donald Trump Or Joe Biden Better For The Stock Market?
The stock market does not believe in Trump’s victory in the election
There is only one day left before the presidential election in the United States, the stock market adheres to earlier forecasts.
Index S&The P 500 (SPX) fell 0.04% from July 31 to October 31. According to market predictions by CFRA Research, this means it will win Joe Biden.
The stock market has a long history of predicting election results. Since World War II, when S&The P 500 fell three months before the November elections, with the incumbent or the outgoing president’s party losing 88% of the time.
In the same way, when S&The P 500 grew during this period, with the incumbent or the outgoing president’s party winning 82% of the time.
The stock market predicted victory Donald Trump until Friday when the index S&The P 500 fell 1.2%. This was just enough for the stock market as a whole to decline over the past three months, giving Biden a sharp edge..
«This year‘s Predictor closed marginally in the red over that three-month period, implying, but not guaranteeing, that Biden will emerge victorious.», – considers Sam Stoval, Chief Investment Strategist CFRA.
Presidential Predictor is in line with Wall Street’s predictions. Goldman Sachs analysts predict «blue wave», when Democrats take back the White House and Senate, and retain control of the House of Representatives. Goldman believes this could be a positive outcome for the markets.
«Such a blue wave will most likely prompt us to raise our forecasts.», – wrote last month by chief economist at Goldman Sachs Jan Hatzius.
According to analysts at Goldman Sachs, the blue wave «will dramatically increase the likelihood» a financial stimulus package worth at least $ 2 trillion shortly after the January 20 inauguration. The investment bank also takes into account Biden’s long-term plans for spending on infrastructure, climate, health and education..
Taken together, these costs «will at least match the likely long-term tax increases on corporations and high-income people», – notes Goldman Sachs.
Likewise, JPMorgan strategists led by Dubravko Lakos-Buhasom noted in July: «By all accounts, a Democratic victory in November would be negative for the stock market. However, we view this result as neutral to slightly positive.».
President Donald Trump has repeatedly predicted that Democrats will destroy the American economy and the stock market will collapse if they win in November.
Moody&# 39; s Analytics found that Biden’s economic proposals, if adopted, would create 7.4 million more jobs than Trump’s proposals. According to Moody&# 39; s economy will return to full employment in the second half of 2022, almost two years earlier than Trump’s plan.
An executive poll conducted by the Yale School of Management in late September found that 77% of participants would vote for Biden. Over 60% predicted he would win. However, a mid-October UBS survey of 500 business owners and 1,000 investors found that 55% of business owners want Trump to win, and 51% of investors support Biden..
CNN poll shows Biden is showing significant nationwide leadership as of Oct 28 and is within the reach of the 270 electoral votes needed to win..
According to RiverFront Investment Group, no incumbent president ever won a second term if there was a recession in the two years leading up to the election..
The only CFRA Presidential Predictor misprediction, when the market fell three months before the election, was in 1956, when the incumbent Dwight D. Eisenhower won Adlai Stevenson, despite a 7.7% drop in the stock market during the Suez Crisis and the Hungarian Uprising.
It’s unclear what this downturn could mean for Trump. The market has dropped over the past three months, mainly due to a spike in coronavirus cases. Trump’s actions in the fight against the pandemic are largely unpopular, although some may also believe that the wave of the Covid-19 pandemic has spiraled out of his control. Despite the recession, Trump still enjoys relatively high popularity among voters for his economic records..