30 days left until the vote United States presidential elections. 30 days during which the campaigns of Democratic candidate Kamala Harris and Republican Donald Trump will try to convince the electorate why they are the best option to occupy the Oval Office. The month of October preceding the vote is historically characterized by volatility in the American stock market. And the month of November which follows the meeting with the new tenant of the White House is not immune to the drastic upheavals on Wall Street since 1980. Indeed, the S&P 500 falls an average of 1% in the 30 days before an election presidential elections and increases by 1.5% in November after the vote.
The polls one month before the elections, which will take place on November 5, give a slight advantage for the Republican candidate. Donald Trump has reduced his positions against Kamala Harris over the last two weeks, according to RealClear Polling, which cross-references data from all polls published in the United States. Harris had emerged as the favorite since replacing Joe Biden in the White House presidential race.
Investors are concerned enough about geopolitical tensions to add a new element of tension to the stock market. But the truth is that statistics do not dispel doubts about what can happen in the 30 days before the vote in the United States. He The S&P 500 was successful 6 of October 11 before the elections although the average balance is negative. The following November with an elected candidate, the results are the same (6 out of 11) since the first elections of Ronald Reagan (Republican) even if the average in this case implies a lead on Wall Street of 1.5%. The best October for Wall Street was when Biden won (2020), while the worst was when Obama was elected in 2008, the year of the financial crisis, when the S&P 500 fell 16.9%.
By political party, the S&P 500 advances and retreats the same number of times in October and November in the face of a Republican victory. From the Democratic perspective, the New York Stock Exchange only tends to rise more if the party wins. donkeys before and after the elections. The statistics are almost as close as those of the latest surveys, which leads many analysis firms not to take them into account. the electoral process itself in the United States when configuring its strategiesas Janus Henderson pointed out.
In 82% of cases since 1980, the six months preceding the election of the President of the United States, Wall Street has recorded a bullish period. In the absence of the month of October, Over the past five months, the S&P 500 is up 11% Therefore, the statistic would tend to hold true again if a collapse does not occur in the next 30 days, which has only happened one October in an election year since 1980.
Looking back at this period, the Democrats would have obtained more revenue in 2024 stock market than the Republicans. All members of the US Congress are required to report their accounts and investments (including those of their partners). And based on these positions, there are two exchange-traded funds (ETFs) that replicate the positions of members of Congress from both parties. He Unusual Whale Subversive Democratic ETF (with Netflix, Apple, Walt Disney or Microsoft in its composition) advances 20.9% this year while its Republican counterpart (with Intel, Shell, Chevron or ConocoPhilips) obtains a return of 18.4% over this period. This shows the interest of both positions in specific and differentiated sectors, although there are also values like Amazon or Nvidia that are repeated in the portfolios of Democrats and Republicans.
The first half of the new American president
Once again, the six months following the election of a president in the United States coincide with a bullish scenario on Wall Street, since over the last forty years, 80% of the six months result in an average increase of 9 % in the United States. Furthermore, the market consensus which reflects Bloomberg considers that the The S&P 500 still has 10% potential up to the twelve-month price target set by the analysis firms at 6,280 points.
These forecasts also include the plans of the future president of the United States. On the one hand, there is the future composition of the country’s Congress, which can make a difference for investors on tax, energy, trade and regulatory matters. And beyond victory of Donald Trump or Kamala Harristhe future president will not be able to act as he wishes if he does not have the support of the parliamentary chamber. “A Trump victory could mean some deregulation, particularly in the banking sector. On the contrary, a Harris victory could draw attention to the health sector,” commented Catherine Kress, director of geopolitical research at BlackRock.
The electoral programs, if applied without restrictions, would result in two almost opposite future scenarios. Harris’ agenda focuses on regulating consumer costs while Trump opts for an approach focused on economic growth. That’s the theory, given that Donald Trump’s proposed tariffs could trigger a trade war with China that would affect global economic growth.
What is clear is that the Republican candidate’s anti-climate speech does not work in favor of listed companies focused on renewable energies. He also proposes deregulating private companies seeking to raise capital and reducing drilling procedures for oil and gas pipelines, which this would benefit the traditional energy sector. On the other hand, Harris intends to stimulate the construction of new housing, which would benefit companies focused on industrial raw materials or construction companies themselves. The Harris administration would advocate for controlling food prices and preventing mergers in the sector to avoid monopolies, based on its proposals. The Democratic discourse advocates the development of renewable energies rather than industry. hydraulic fracturing or fossil fuels.
MFS Investment Management recalls, however, that only 28% of Biden’s political campaign promises were kept and only 23% in the case of Donald Trump. “Time will tell, but we don’t think investing based on campaign rhetoric is a good philosophy. Additionally, historical disparities in stock returns are surprisingly modest regardless.” the party that controls the White House and Congress“, comments the firm’s director of strategy, Jonathan W. Hubbard.
