It doesn’t matter what the polls say, the stock market knows who is going to win and today we find out who the market picks.
The stock market has been a great indicator of who is going to win the presidential election every four years.
How it works is rather simple.
If the S&P 500 is up between July 31st and October 31st of the election year, the incumbent party wins.
If the S&P 500 is down between July 31st and October 31st of the election year, then the challenging party wins.
This has been correct 86% of the time.
Sam Stovall, the chief investment strategist at CFRA explains the history of the prediction.
“Going back to World War II, the S&P 500 performance between July 31 and Oct. 31 has accurately predicted a challenger victory 86 percent of the time when the stock market performance has been negative.”
If that is true this year, then Donald J. Trump will be our next president because the S&P 500 is down 2.2% over the last three months.
The prediction has been very accurate, but this is no normal election year and 2.2% is not a huge drop.
If this prediction tells us anything, it is that Trump has a chance and that this election is going to be closer than anyone thought.
Do you agree with the stock market prediction? Let us know in the comments below.