What one stock market gauge is predicting about the presidential race

If history is immoderate guide, 1 banal marketplace gauge suggests that Vice President Kamala Harris will conclusion erstwhile President Donald Trump successful nan 2024 statesmanlike race. 

In each but 2 elections since 1944, nan statement successful nan White House has retained powerfulness erstwhile nan U.S. banal marketplace advances earlier Election Day, aliases nan play betwixt nan extremity of July and Halloween, according to an predetermination predictor devised by Sam Stovall, main finance strategist astatine CFRA Research, based retired of Allentown, Pennsylvania. 

In 2020, nan S&P 500 fell 0.04% from July 31 to October 31, pinch then-President Donald Trump losing nan predetermination to President Joe Biden. While nan result successful nan 2024 predetermination is not yet known, nan S&P 500 roseate 3.3% during that three-month span this year.

To beryllium sure, galore different factors tin power a statesmanlike race, and Wall Street is nary alien to making incorrect predictions, ranging from nan guidance of nan banal marketplace to predetermination outcomes. And betting markets that let mean investors to spot wagers connected nan predetermination result person successful caller weeks favored Trump.

"You tin opportunity location is benignant of an overlap — nan marketplace usually goes up connected an yearly ground and voters thin to springiness nan incumbent nan use of nan doubt, truthful it makes consciousness if nan marketplace goes up astir of nan clip and nan incumbent gets re-elected astir of nan time," Stovall told CBS MoneyWatch.

Even much reliable are periods erstwhile nan banal marketplace falls during nan play from July 31 to October 31, successful which lawsuit nan incumbent has been replaced 89% of nan time. That predictor grounded only once, successful 1956, according to Stovall, pointing to nan twelvemonth erstwhile incumbent President Dwight Eisenhower defeated Adlai Stevenson, contempt nan S&P 500 tumbling 7.7% successful nan play up of nan election.

Still, Stovall notes a mathematician mightiness scoff astatine basing a exemplary connected specified a constricted sample, successful this lawsuit nan 21 statesmanlike elections held successful nan U.S. since World War II. 

"Is this really statistically significant? I deliberation nan reply is no, but it makes for absorbing copy," nan strategist said. "You tin person information show immoderate communicative you want."

Limited aliases not, Stovall is sticking pinch his statesmanlike predictor.  

"I judge we will spot a Harris triumph ultimately, because I'm a very large believer successful history and rules-based investing," Stovall told CBS News.

In:
• Kamala Harris
• Donald Trump