For the past 30 years, the S&P 500 has rallied the week before the presidential election, with one notable exception – 2016 – according to Miller Tabak strategist Matt Maley. The average return in the six cases since 1992 was 3.8%, he wrote in a note on Saturday.
“Although the stock market fell 1.9% over the seven days of trading in 2016, you have to go back to 1988 to find another time it failed to rally in the last week and a half. of the election campaign, ”Maley said.
Investors are bracing for the latter part of the campaign, with Democratic candidate Joe Biden still in favor of beating President Donald Trump, according to the latest data from PredictIt. The S&P 500 has gained 3% so far in October, although it remains about 3% below its high in early September.
“Nothing is ever guaranteed in the markets… but our point is that history tells us the chances are high that the market will rally by election day,” Maley said.
(Updates S&P move to fourth paragraph)