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- Data from LPL Financial shows that the stock market has a good track record in predicting the winner of the US presidential election.
- Since 1984, the S&P 500 has correctly predicted the outcome of each election based on the price movements in the three months preceding the election.
- Since 1928, Standard & Poor̵
- As we approach the November elections, investors should pay close attention to the stock market to find clues about whether President Donald Trump or former Vice President Joe Biden will win.
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Ryan Detrick, senior market strategist at LPL Financial, said that since 1984, the stock market has correctly predicted the winner of each US presidential election.
Back in 1928, the S&P 500 index correctly predicted the percentage of winners to be 87%.
How can investors use the S&P 500 index to better understand President Donald Trump or former Vice President Joe Biden most likely to win the election on November 3?
By tracking the market price trend three months before the election.
In a report released on Monday, Daytrick said: “When the S&P 500 index goes up 3 months before the election, the current party usually wins, and when the stock market goes down, the current party usually loses.”
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In 2016, few people expected Trump to beat Hillary Clinton-except for the stock market.
“The Dow Jones index fell for nine consecutive days before the election, and the copper price (President Trump’s infrastructure is more built) hit a record high for 14 consecutive days, laying the foundation for a change in the leadership of the White House party,” Detrick said.
The stock market incorrectly predicted that the three elections for the winner of the presidential election were:
- In 1956, current President Dwight D. Eisenhower was re-elected, although the S&P 500 index fell 3.2% three months before the election.
- In 1968, although the S&P 500 index rose 6% in the three months before the election, the current president lost to Richard Nixon.
- In 1980, although the S&P 500 index rose 6.9% in the three months before the election, the current president lost to Ronald Reagan.
Investors who are keen on presidential politics should pay close attention to the stock market in the three months before the November 3 election.
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