WHO WILL WIN THE RACE FOR CONGRESS, AND HOW IT COULD IMPACT THE FINANCIAL MARKETS ?
MIDTERM ELECTIONS TAKE PLACE THIS TUESDAY, BUT WE TAKE A LOOK AT SOME HISTORICAL FACTS , NO MATTER THE WINNING PARTY
- SINCE 1946, THERE HAVE BEEN 18 MIDTERM ELECTIONS, FOR EACH OF THE PAST 18 MIDTERMS, STOCK HAVE ALWAYS CLIMBED HIGHER A YEAR LATER , THE FOURTH QUARTER OF THE MIDTERM ELECTION YEAR AND THE FIRST TWO QUARTER OF THE FOLLOWING YEAR HAVE HISTORICALLY BEEN THE MOST BULLISH NINE MONTHS IN THE FOUR YEAR PRESIDENT CYCLE, YO CAN SAY SEPCIFICALLY THE THIRD YEAR OF PRESIDENTIAL TERM AS SHOWN IN THE CHART,
- STOCKS HAVE JUMPED AN AVERAGE OF 17% IN THE YEAR AFTER A MIDTERM
- HISTORICALLY, WE HAVE ALSO SEEN MARKET VOLATILTY INCREAS AHEAD OF THE MIDTERMS AS WE ARE SEEING NOW,US STOCKS TYPICALLY PERFORM POORLY FROM JANUARY TO OCTOBER IN MIDTERM YEARS, THE DROP AN AVEARGE OF ROUGHLY 1%, IN ALL OTHER YEARS STOCKS RISE ROUGHLY 7% IN THAT TIME FRAME
- HISTORICALLY , A DEMOCRAT CONTROLLED HOUSE HAS BEEN ACTUALLY SLIIGHTLY BETTER THAN REPUBLICANS CONTROLLED HOUSE FOR STOCK, BUT IF REPUBLICANS RETAIN CONTROL OF THE HOUS WE CAN EXPECT A STRONG RALLY IN THE USD
- STOCKS HAVE PERFROMED BEST WITH A DEMOCRATIC PRESIDENT AND REPUBILICAN CONTROLLED CONGRESS(POSTING AVERAGE GAINS OF 18.3% FROM 1950 THROUGH 2017) FOLLOWED CLOSELY BY A 15.7% GAIN WITH A REPUBLICAN
SIDE NOTE: TWO THIRDS OF VOTERS SAY VOTE IS ABOUT TRUMPPRESIDENT AND A SPPLIT CONGRESS
