US stock market history around elections | Canada News Media
Connect with us

Politics

US stock market history around elections

Published

 on

 

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

Source link

Politics

‘Disgraceful:’ N.S. Tory leader slams school’s request that military remove uniform

Published

 on

 

HALIFAX – Nova Scotia Premier Tim Houston says it’s “disgraceful and demeaning” that a Halifax-area school would request that service members not wear military uniforms to its Remembrance Day ceremony.

Houston’s comments were part of a chorus of criticism levelled at the school — Sackville Heights Elementary — whose administration decided to back away from the plan after the outcry.

A November newsletter from the school in Middle Sackville, N.S., invited Armed Forces members to attend its ceremony but asked that all attendees arrive in civilian attire to “maintain a welcoming environment for all.”

Houston, who is currently running for re-election, accused the school’s leaders of “disgracing themselves while demeaning the people who protect our country” in a post on the social media platform X Thursday night.

“If the people behind this decision had a shred of the courage that our veterans have, this cowardly and insulting idea would have been rejected immediately,” Houston’s post read. There were also several calls for resignations within the school’s administration attached to Houston’s post.

In an email to families Thursday night, the school’s principal, Rachael Webster, apologized and welcomed military family members to attend “in the attire that makes them most comfortable.”

“I recognize this request has caused harm and I am deeply sorry,” Webster’s email read, adding later that the school has the “utmost respect for what the uniform represents.”

Webster said the initial request was out of concern for some students who come from countries experiencing conflict and who she said expressed discomfort with images of war, including military uniforms.

Her email said any students who have concerns about seeing Armed Forces members in uniform can be accommodated in a way that makes them feel safe, but she provided no further details in the message.

Webster did not immediately respond to a request for comment.

At a news conference Friday, Houston said he’s glad the initial request was reversed but said he is still concerned.

“I can’t actually fathom how a decision like that was made,” Houston told reporters Friday, adding that he grew up moving between military bases around the country while his father was in the Armed Forces.

“My story of growing up in a military family is not unique in our province. The tradition of service is something so many of us share,” he said.

“Saying ‘lest we forget’ is a solemn promise to the fallen. It’s our commitment to those that continue to serve and our commitment that we will pass on our respects to the next generation.”

Liberal Leader Zach Churchill also said he’s happy with the school’s decision to allow uniformed Armed Forces members to attend the ceremony, but he said he didn’t think it was fair to question the intentions of those behind the original decision.

“We need to have them (uniforms) on display at Remembrance Day,” he said. “Not only are we celebrating (veterans) … we’re also commemorating our dead who gave the greatest sacrifice for our country and for the freedoms we have.”

NDP Leader Claudia Chender said that while Remembrance Day is an important occasion to honour veterans and current service members’ sacrifices, she said she hopes Houston wasn’t taking advantage of the decision to “play politics with this solemn occasion for his own political gain.”

“I hope Tim Houston reached out to the principal of the school before making a public statement,” she said in a statement.

This report by The Canadian Press was first published Nov. 8, 2024.

The Canadian Press. All rights reserved.

Source link

Continue Reading

Politics

Saskatchewan NDP’s Beck holds first caucus meeting after election, outlines plans

Published

 on

 

REGINA – Saskatchewan Opposition NDP Leader Carla Beck says she wants to prove to residents her party is the government in waiting as she heads into the incoming legislative session.

Beck held her first caucus meeting with 27 members, nearly double than what she had before the Oct. 28 election but short of the 31 required to form a majority in the 61-seat legislature.

She says her priorities will be health care and cost-of-living issues.

Beck says people need affordability help right now and will press Premier Scott Moe’s Saskatchewan Party government to cut the gas tax and the provincial sales tax on children’s clothing and some grocery items.

Beck’s NDP is Saskatchewan’s largest Opposition in nearly two decades after sweeping Regina and winning all but one seat in Saskatoon.

The Saskatchewan Party won 34 seats, retaining its hold on all of the rural ridings and smaller cities.

This report by The Canadian Press was first published Nov. 8, 2024.

The Canadian Press. All rights reserved.

Source link

Continue Reading

Politics

Nova Scotia election: Liberals say province’s immigration levels are too high

Published

 on

 

HALIFAX – Nova Scotia‘s growing population was the subject of debate on Day 12 of the provincial election campaign, with Liberal Leader Zach Churchill arguing immigration levels must be reduced until the province can provide enough housing and health-care services.

Churchill said Thursday a plan by the incumbent Progressive Conservatives to double the province’s population to two million people by the year 2060 is unrealistic and unsustainable.

“That’s a big leap and it’s making life harder for people who live here, (including ) young people looking for a place to live and seniors looking to downsize,” he told a news conference at his campaign headquarters in Halifax.

Anticipating that his call for less immigration might provoke protests from the immigrant community, Churchill was careful to note that he is among the third generation of a family that moved to Nova Scotia from Lebanon.

“I know the value of immigration, the importance of it to our province. We have been built on the backs of an immigrant population. But we just need to do it in a responsible way.”

The Liberal leader said Tim Houston’s Tories, who are seeking a second term in office, have made a mistake by exceeding immigration targets set by the province’s Department of Labour and Immigration. Churchill said a Liberal government would abide by the department’s targets.

In the most recent fiscal year, the government welcomed almost 12,000 immigrants through its nominee program, exceeding the department’s limit by more than 4,000, he said. The numbers aren’t huge, but the increase won’t help ease the province’s shortages in housing and doctors, and the increased strain on its infrastructure, including roads, schools and cellphone networks, Churchill said.

“(The Immigration Department) has done the hard work on this,” he said. “They know where the labour gaps are, and they know what growth is sustainable.”

In response, Houston said his commitment to double the population was a “stretch goal.” And he said the province had long struggled with a declining population before that trend was recently reversed.

“The only immigration that can come into this province at this time is if they are a skilled trade worker or a health-care worker,” Houston said. “The population has grown by two per cent a year, actually quite similar growth to what we experienced under the Liberal government before us.”

Still, Houston said he’s heard Nova Scotians’ concerns about population growth, and he then pivoted to criticize Prime Minister Justin Trudeau for trying to send 6,000 asylum seekers to Nova Scotia, an assertion the federal government has denied.

Churchill said Houston’s claim about asylum seekers was shameful.

“It’s smoke and mirrors,” the Liberal leader said. “He is overshooting his own department’s numbers for sustainable population growth and yet he is trying to blame this on asylum seekers … who aren’t even here.”

In September, federal Immigration Minister Marc Miller said there is no plan to send any asylum seekers to the province without compensation or the consent of the premier. He said the 6,000 number was an “aspirational” figure based on models that reflect each province’s population.

In Halifax, NDP Leader Claudia Chender said it’s clear Nova Scotia needs more doctors, nurses and skilled trades people.

“Immigration has been and always will be a part of the Nova Scotia story, but we need to build as we grow,” Chender said. “This is why we have been pushing the Houston government to build more affordable housing.”

Chender was in a Halifax cafe on Thursday when she promised her party would remove the province’s portion of the harmonized sales tax from all grocery, cellphone and internet bills if elected to govern on Nov. 26. The tax would also be removed from the sale and installation of heat pumps.

“Our focus is on helping people to afford their lives,” Chender told reporters. “We know there are certain things that you can’t live without: food, internet and a phone …. So we know this will have the single biggest impact.”

The party estimates the measure would save the average Nova Scotia family about $1,300 a year.

“That’s a lot more than a one or two per cent HST cut,” Chender said, referring to the Progressive Conservative pledge to reduce the tax by one percentage point and the Liberal promise to trim it by two percentage points.

Elsewhere on the campaign trail, Houston announced that a Progressive Conservative government would make parking free at all Nova Scotia hospitals and health-care centres. The promise was also made by the Liberals in their election platform released Monday.

“Free parking may not seem like a big deal to some, but … the parking, especially for people working at the facilities, can add up to hundreds of dollars,” the premier told a news conference at his campaign headquarters in Halifax.

This report by The Canadian Press was first published Nov. 7, 2024.

— With files from Keith Doucette in Halifax

Source link

Continue Reading

Trending

Exit mobile version