Tags: Stocks | Democratic | GOP | Congress

Stocks Historically Perform Well Under Democratic President, GOP Congress

By    |   Wednesday, 05 November 2014 01:47 PM

You may already have read that stocks perform particularly well in periods after mid-term elections, but did you know that stocks have historically done quite well during times of a Democratic president and a unified GOP Congress too?

From Dec. 31 1900, to Oct. 31 2014, the S&P 500 index gained an average of 8.6 percent a year during the 12 years we have had a Democratic president and a unified GOP congress, according to Standard & Poor's Equity Research.

That trails only the annual increase for the four years during which we've had a Democratic president and a split Congress: 13 percent.

The worst performing iteration has been a Republican president and a split Congress, which has generated a 3.2 percent annual gain in its 10 years of existence.

The S&P 500 averaged an advance of 7 percent over the 114-year period as a whole.

As for stocks' tendency to outperform in the months following mid-term elections, Dan Greenhaus, chief strategist at BTIG, suggests taking it with a grain of salt.

This is "almost always the case in any data mining exercise that looks at stock prices through the end of the year," he writes in a commentary obtained by MarketWatch.

However, if you look at just the performance from the mid-term election so to the end of the year, the data are "mixed," Greenhaus notes, adding that is the reason analysts like to go out further on the timeline.

GOP election victories helped boost stocks Wednesday.

"Republicans are seen as more business friendly, so it's not surprising if markets react positively to the mid-term results," Veronika Pechlaner, a portfolio manager at Ashburton, tells Bloomberg. "Earnings have been very reassuring."

Of the S&P 500 companies that have reported results so far this quarter, 81 percent beat analysts' profit estimates, according to Bloomberg.

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You may already have read that stocks perform particularly well in periods after mid-term elections, but did you know that stocks have historically done quite well during times of a Democratic president and a unified GOP Congress too?
Stocks, Democratic, GOP, Congress
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2014-47-05
Wednesday, 05 November 2014 01:47 PM
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