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US stock market history around elections

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U.S. President Donald Trump and Democratic presidential candidate former Vice President Joe Biden answer a question during the second and final presidential debate at the Curb Event Center at Belmont University in Nashville, Tennessee, October 22, 2020.
Morry Gash | Pool | Reuters

Does it matter for stocks who wins the White House? Is there anything unusual about the candidates this year that could impact the markets, regardless of who wins?

For answers, we turn to Ed Clissold, chief U.S. Strategist for Ned Davis Research, who has studied elections and the impact on markets going back to 1900.

This Q&A was derived from written research and an interview with Clissold. It has been edited for brevity.

There seems to be a lot of confusion about this election and the impact on the markets. What’s your take?

Part of the problem is that this is an unusual situation. The incumbent is in the middle of a recession and a big drop in the market, even though that occurred earlier in the year. I don’t mean a “recession” as technically defined by the National Bureau of Economic Research (NBER); I mean that a large portion of the U.S. believes we are in a recession.

Why is that perception important?

When those conditions are in place, the incumbent is a serious underdog.  Since 1900, the incumbent party has won five times and lost nine when there was a 20% decline in the DJIA or a recession in the election year.   But the last incumbent to win under these circumstances was Truman in 1948.  Since 1952, no party has retained the White House when there was either a 20% decline in the markets or a recession, and both have taken place in 2020.

But isn’t this a unique recession?  This was caused by Covid-19.

Yes. Because the cause of the 2020 recession is an exogenous shock, one of the biggest questions heading into the fall is whether voters will blame President Trump for the economy. Most recessions have a more complicated genesis than this one, and Trump is certainly trying to make the case that he is the better one to handle this.

Is there anything unique about Biden?  He is proposing changes in the tax code on both a personal and corporate level.  That matters to Wall Street, doesn’t it?

Yes. The main concerns we have heard from our clients is that higher taxes and more regulations would be detrimental to stocks.

OK, you’ve made it clear the circumstances are unusual this year.  But what about the historical record?  Does the stock market do better or worse when a Republican or a Democrat is in the White House?

The markets tend to go up whether there is a Democrat or a Republican in the White House. When adjusted for inflation, the Dow Jones Industrial Average has gained an average of 3.8% annually under Democrats since 1900, versus 1.1% under Republicans.

Why is that?

The President is not as influential on the economy as many people think. There are many factors that drive returns and who is in the White House is only one of many factors, including the fact that the U.S. is a capitalist society, where the means of production is mostly in private hands, and that there is a court system that enforces contracts.

What about when one party controls both the Congress and the White House?

When Republicans control both the Congress and the White House, returns have averaged 7.09% a year.  Under Democratic presidents, the market has risen faster when there has been a check on their power. When Democrats control the Congress and the Presidency, the market has risen an average of 2.96% a year, but 5.21% with a Democratic President and a Republican Congress.

What about immediately after an election, going into the end of the year?

The market tends to perform better when the incumbent party wins than when the incumbent party loses.

Why is that?

It’s likely because the market often reacts to uncertainty, and a change in party leadership represents an additional unknown.

Does it matter for that short period whether it is a Republican or Democrat who has won or lost?

The strongest gains going into the end of the year occur when incumbent Republicans win, and the biggest losses when incumbent Republicans have lost, on average, likely because Republicans often positioned themselves as pro-business.

Does that outperformance when the Republicans have lost extend into the following year?

No. That relative performance has reversed in post-election years, with the strongest average gain in years following incumbent Republican losses.

So what does this tell us?  Seems like this debate about the Republican vs. Democrat impact on stocks is a lot about perception.

Yes. Party control may be more about sentiment than fundamentals in most cases. Also, once the election is over, investors can focus on other things, like earnings, economic growth, or interest rates, so whatever sentiment-driven market action that occurs in the election year tends to fade and reverse itself.

 

Source: – CNBC

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The real reason more women should be in politics – TVO

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I got a very short, provocative email the other day from a former Ontario finance minister, whose privacy I will protect here, since it was a personal note that he sent. He was responding to a piece I’d just written about what it’ll take to get more women into politics. His note simply said: “Why?”

I inferred from this that he wanted to know why we needed more women in politics. What possible difference could it make? Isn’t it more important to have the “best people” in public life, regardless of gender?

All great questions. Fortunately (and coincidentally), I had just watched a Zoom conversation, organized by Ryerson University’s Democracy Forum, featuring two of the most trailblazing women ever to serve in politics in Canada. So, to that former finance minister who emailed me, here comes your answer.

Kathleen Wynne and Rachel Notley both made history in their respective provinces during the past decade. Wynne became Ontario’s first female premier in 2013 and won a majority government in 2014. She was also the province’s first openly gay premier. In 2015, Notley became the first New Democrat to inhabit the premier’s office in Alberta. She learned her politics from her late father Grant, Alberta’s NDP leader from 1968 to 1984. Notley did her first campaigning as a child of three and a half and has a picture of herself on Tommy Douglas’s knee. (As a young girl, she famously once told federal NDP leader Ed Broadbent, “You have that same fake politician smile as my father.”)

It seems both women inherited their partisan stripes from their parents’ generation. Wynne came from a Liberal family, and even in Grade 8 at MacKillop Public School in Richmond Hill, her colours were on display. At mock Parliament, there were 30 Conservatives, four Liberals, and one New Democrat. Wynne was one of the Liberals. Even then.

Five years ago, Wynne and Notley were two of six female premiers in Canada. That’s right: for the first time ever, the majority of the country’s premiers were female. They also represented the vast majority of Canada’s population, as they were serving in the biggest provinces (Ontario, Quebec, British Columbia, and Alberta).

And then the wheel turned. Within a few years, there’d be none. Today, there’s one (Caroline Cochrane in the Northwest Territories).
Did having more women in the premier’s offices of the country make a difference?

“It certainly did change the tone,” said Notley. “There’s a different tone when men replace women, especially if they don’t see elevating women as an important part of their approach.”

Notley added that women leaders are more willing to listen to contrary views — for example, around the cabinet table. “They don’t walk in with a pre-set view that they need to defend,” she said.

For her part, Wynne pointed to a Council of the Federation meeting (essentially, all the premiers) in 2013 at Niagara-on-the-Lake as all the proof you need that women in politics do things differently and achieve different outcomes. The issue of the Conservative federal government’s unwillingness to call a public inquiry into missing and murdered Indigenous women had come up for discussion.

“I can tell you categorically, it was the women at the table who structured the discussion so the men had to agree to support it,” Wynne said. “There was some shifting in their chairs, but they had to go along.”

She added: “It’s just very clear that, when there’s a critical mass of women at the table, it means different issues get discussed, and there’s a different commitment to substance.”

Wynne is adamant that most women get into politics to advance a cause, whereas men look to wield authority or exercise power. Her first foray into politics was half a century ago, when she tried to convince her high school in Richmond Hill to repeal a ban on girls wearing pants. Later, after having kids of her own, she became an educational activist, which led her to run for school-board trustee and eventually Queen’s Park. She’s still the MPP for Don Valley West, although she’s announced she will serve out this term, and that’ll be it.

“When you have 50 per cent women at the cabinet table or in caucus, you talk about different issues and solve them in a different way,” Wynne insisted.

“It also sends an important signal,” added Notley. “It says we’re going to make sure that women, who are half the population, are also half the decision makers.”

Both women have also bemoaned the fact that, for much of the public, political leadership still has to look big and strong. Wynne has mentioned in the past how hard it was to project a presence of strong leadership when she campaigned in the 2018 election against Doug Ford, who physically is just much bigger than she is.

“We’ve got to change the criteria of what a good leader looks like,” Notley said. “And, left to their own devices, all political parties will leave women behind. Even my party operates in a very combative, partisan field. It makes it harder for women to participate fully.”

Wynne even fessed up to the fact that, when she was premier, she’d drop a curse word “strategically” every now and then to project a more traditional sense of strength.

“I may not be one of the boys, but I know how to hold my own,” she joked.

“I swear excessively,” added Notley, to bigger laughs.

Notley, meanwhile, is still leader of the opposition in Alberta and hopes to get back into the premier’s office. She still has a chance to break one of the worst curses in Canadian political history: no female first minister has ever been re-elected. Notley’s NDP is currently seven points up on the governing United Conservative Party. “I’d like to break that pattern,” she said.

There’s been considerable debate as to why, so far, no women leaders have been able to do it. Some say the barriers to winning and getting re-elected are bigger for women. Toronto Star columnist Martin Regg Cohn, who moderated the session, suggested that “women only get a chance to be leader at the end of a dynasty. As men run for cover, women step up. They’re braver. They get an opportunity to become leader because often the best men won’t run.”

“That’s why the odds are stacked against us,” added Wynne. “So, Rachel, no pressure, but it’s all on you.”

So, to the former Ontario finance minister who wrote me the shortest email I’ve ever received, I hope this answers your question.

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Turkey's Ambitious Greens Aim to Colour Country's Politics – Balkan Insight

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“Turkey is an ecocidal country. It struggles with ecological problems across the country,” Urbarli said. [“Ecocide] is a term created by merging the terms “ecology” and “genocide”.]

“The government continuously gives licences to mining companies which destroy nature. The North Marmara Motorway and Kanal Istanbul projects have had tremendous effects on nature. The Marmara Sea is already practically dead and the Black Sea could also die because of these projects,” Urbarli claimed.

The motorway, which will be almost 470km long when complete, is designed to connect European Turkey with the rest of the country, skirting Istanbul and relieving congestion in the city.

Meanwhile some 79 per cent of the Kaz Mountains, on the Aegean coast, which has the country’s cleanest air and is home to many endemic species, is being licenced for mining by the government, despite popular opposition.

According to Northern Forests Defence, NFD, an advocacy organisation set up to protest the forests between the Sea of Marmara and the Black Sea, at least 3.7 million trees have been cut down to make way for the construction of the North Marmara Motorway.

More will be cut down if the Kanal Istanbul project is actualised. The proposed canal is set to be 43 kilometres long and 400 metres wide and will connect the Black Sea to the Sea of Marmara.

Its construction would involve the destruction of a natural lagoon and a reservoir, which is one of Istanbul’s largest water reserves. President Recep Tayyip Erdogan has described the project as his “dream”.

“The government thinks nature can be spent and destroyed … forests are being destroyed, and they think that they can replace them with landscaped designs next to motorways. The ecosystem is not what they presume,” Urbarli said.

Urbarli cited Istanbul’s water problem as an example of the government’s destructive projects. “The government had been warned many times that these forests and the area for the motorway are the water reservoir of Istanbul but all objections were overruled. Now Istanbul faces a great water shortage,” Urbarli continued.

According to the Istanbul Municipality, only 24 per cent of the city’s reservoir dams are full of water and some dams near North Marmara Motorway are empty. “If this situation continues like this, Turkey will have an unprecedented ecological problem,” Urbarli warned.

The only way out from these crises is Green thinking, he says.

Turning to future political alliances, he said: “We are not currently part of any political alliances but we are talking about this with other parties.

“Whether or not we take part in the next elections, we believe Green thinking will shape these elections; a Green discourse has started to appear on other opposition parties’ agendas,” he added.

“Other parties will need Greens because of their knowledge and experience of green politics – and the Green Party needs other parties so it can enter political alliances,” he concluded.

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The pandemic was already polarizing — now vaccines have become partisan as well – CBC.ca

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It was inevitable that the federal government’s handling of COVID-19 vaccines would become political. Politics has shaped public perceptions of the pandemic’s severity since it began.

But now the vaccines themselves are becoming politically polarized, with divisions emerging between those who want them and those who don’t.

Since the spring, polls have shown consistently that one of the major factors associated with how Canadians view the pandemic is how they vote. Supporters of the Liberals and New Democrats have been more likely to report concerns about the public health risks of COVID-19, while Conservative voters have been more likely to eschew precautions and oppose restrictions.

Polling conducted by a number of firms in November — as cases across the country continued to rise — still showed signs of this split between left and right in Canada.

The latest survey by Léger for the Association of Canadian Studies suggests that only 12 per cent of Liberal voters want to ease pandemic restrictions as soon as possible — even if another wave is possible early in the new year — while 31 per cent of Conservative voters say they want governments to ease up.

The poll also found that 52 per cent of Conservative voters are very or somewhat afraid of contracting COVID-19, compared to 66 per cent of New Democratic voters and 74 per cent of Liberal supporters.

A recent poll by the Angus Reid Institute (ARI) found that between 87 and 89 per cent of Canadians who voted for the Liberals, NDP or Bloc Québécois in last year’s election report regularly wearing masks indoors; 71 per cent of Canadians who voted for the Conservatives reported doing the same.

And Liberal, NDP and Bloc voters were about twice as likely as Conservative supporters to list COVID-19 as one of their top three issues of concern.

When asked how governments should prioritize their responses to the pandemic, Conservatives were about twice as likely as Liberals to tell a recent survey for Abacus Data that there has been “too little emphasis on limiting the impact on jobs, income and the economy” — and more than three times as likely to say there has been “too much emphasis on limiting the health risk.”

We’ve seen proof of these political attitudes in how Canadians voted in October’s provincial elections in Saskatchewan and British Columbia. The New Democrats (the main left-of-centre party in both provinces) did significantly better among voters who cast ballots by mail — and avoided crowds by doing so — than among those who voted in person. Right-of-centre parties in both provinces did much better in the in-person voting.

The polarization of immunization

Since attention has turned to vaccines, the Conservatives in Ottawa have focused their attacks on the federal government’s plan to acquire and distribute the vaccines in this country. Conservative Leader Erin O’Toole has claimed that Canada will be “near the back of the line,” though vaccines are expected to start arriving in early 2021.

But this week’s Léger poll suggests a minority of Canadians share O’Toole’s concern. While the poll suggests 37 per cent of Canadians are worried Canada might not get the vaccine at the same time as the United States and the United Kingdom — where the vaccines are produced — 48 per cent said they are “not that concerned” and feel “a few months won’t make much of a difference.”

A recent Léger poll suggests Conservative voters are more likely than other Canadians to be concerned about a delay in obtaining vaccines — and less likely to want to get vaccinated as soon as possible. (Justin Tang / Canadian Press)

It’s hard not to see partisanship behind some of this, as the Léger poll suggests Conservative voters are the ones most likely to be concerned about delays — and the ones least likely to say they would take the first vaccine made available to the public.

This is in part because many Canadians harbour doubts about potential COVID-19 vaccines.

A recent Ipsos/Global News poll suggested that 71 per cent of Canadians feel nervous about a vaccine being created and approved so quickly. A similar share of those surveyed said they are concerned about long-term side-effects.

On average, polls conducted by Abacus, ARI and Léger suggest only 34 per cent of Canadians would get immunized as soon as possible, while 41 per cent said they would wait a little before getting the needle. Between 11 and 15 per cent of those polled said they would not get vaccinated at all.

Conservatives more likely to wait or avoid vaccination

There is certainly a level of distrust among Conservative voters specific to the Trudeau government. According to Léger, about half of Conservative voters believe that the current federal government is withholding information about vaccines. Only 15 per cent of Liberal voters feel the same way.

This trust (or lack of it) could have an impact on Canadians’ willingness to get vaccinated. In the ARI, Abacus and Léger surveys, an average of just 27 per cent of Conservative voters said they would get vaccinated as soon as possible, compared to 43 per cent of Liberals and 39 per cent of New Democrats.

Canada has already pre-purchased millions of doses of multiple COVID-19 vaccines, but the government cannot guarantee when Canadians will get them. And some caution it could be months before this country can begin the distribution process. 1:58

An average of 84 per cent of Liberal voters and 79 per cent of New Democrats said they would get vaccinated either right away or eventually, compared to 69 per cent of Conservatives. The number who said they won’t get vaccinated averaged just five per cent of the sample among Liberal supporters and nine per cent among New Democrats, but rises to 19 per cent among Conservative voters.

The potential public health risk of this polarization could be mitigated if the federal government revealed a detailed plan for the acquisition and distribution of vaccines. Statements of support for such a plan from conservative premiers — some of whom have echoed O’Toole’s attacks recently — also could help to reduce this partisan split before vaccine doses start arriving.

Will that happen? The answer might depend on how much partisanship is running through Canadians’ veins right now.

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