What Do Wall Street's Economic Indices Predict for the Election?

By Grand Rapids Anonymous
Monday, October 26, 2020 at 12:56:00 P.M. EDT

Anyone looking for clues as to the likelihood of Trump winning re-election, the S&P 500 is an over 85% indicator of such things. Measured from August 1st to November 1st, if the index is above the August starting point of 3272 on November 1st, the incumbent is likely to win. Currently at 3385. A drop of 150 S&P points can happen in a hurry, if Wall Street thinks Trump’s goose is cooked. The financial media has spread the story, the last two weeks, that stocks would love Biden in—that’s why we’ve seen rising prices—based on more stimulus. I disagree. Corporate taxes would explode—as would individual tax rates. Stocks would suffer.

But first we must see how stock prices act this week, to get a better handle on Trump’s chances. --GRA

 

By Grand Rapids Anonymous
Friday, October 30, 2020 at 2:18:00 A.M. EDT

Overnight Stock Futures Fall 40 Points Below 3272 Level

GRA: As of now, the formula I've posted a couple times is predicting a Biden victory. This formula has an 86% track record—so it’s not perfect—but pretty good. If the S&P stays in this area and Trump somehow DOES win, the market will explode higher imho.

It must be over 3272 on Friday’s close to indicate Trump MIGHT win. A tough task, indeed. --GRA

 

Stock Market “predictor” of Presidential Election Leans Biden with 3 Hours to Go
By Grand Rapids Anonymous
Friday, October 30, 2020 at 1:13:00 P.M. EDT

(Marketwatch) The stock market’s late October tumble is on the verge of delivering bad news to President Donald Trump’s re-election hopes.

The “Presidential Predictor,” popularized by Sam Stovall, CFRA’s chief investment strategist, tracks the S&P 500 index’s SPX, -1.73% performance from July 31 to Oct. 31. Going back to 1944, it’s found that a positive move over that stretch usually corresponds to a presidential victory by the incumbent party, while a negative move signals a loss (see chart below).

The S&P 500 on Friday, the last trading day of October, was down 39.13 points, or 1.2%, at 3,270.98, taking it below the July 31 close at 3,271.12. Trading was choppy, with the index falling as low as 3,240.21.

“On an intraday basis, the Presidential Predictor is now in agreement with the polls. It is obviously going to be a tight election that may take some time to be decided,” Stovall said, in an email.

Polls show Democratic challenger Joe Biden leading Trump nationwide, though his advantage has narrowed in recent weeks. Biden is also seen ahead in key battleground states, though strategists see some scope for Trump to pull out an Electoral College victory, but his path appears more difficult than in 2016. GRA