Trump or Harris? The Stock Market Predicts the Winner

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A close race in the American election arena, with intense competition on online prediction markets… and amidst it all, a new oracle emerges.

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Since being announced as the Democratic Party candidate following U.S. President Joe Biden‘s withdrawal from the race, Kamala Harris has topped almost all polls, due to several factors, including the enthusiasm she has generated among American voters. However, it seems that stock market indicators are the real arbiters between Harris and her Republican opponent Donald Trump, in the elections scheduled for November 5th.

According to “Market Watch,” the U.S. stock market is one of the best predictors of the winner in White House elections. By the Numbers

The American site “Business Insider” also agrees that the stock market helps predict the winner of presidential elections.

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The site considers the performance of the “Standard & Poor’s 500” index in the three months preceding the elections to be the main indicator to watch.

To confirm this analysis, it notes that since 1928, the “Standard & Poor’s 500” index has been accurate in predicting election results 83% of the time.

According to Adam Turnquist, chief technical strategist at LPL, since 1928, the “Standard & Poor’s 500” index has an accuracy rate of 83% in determining which political party will win the White House.

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The economic expert highlighted the performance of the stock market in the three months preceding the election day, which began on August 5th.

Turnquist explains that “since 1928, every time the Standard & Poor’s 500 index was positive in the three months leading up to the election, the party in power retained the White House 80% of the time.”

For example, in the three months before the 2008 elections, the “Standard & Poor’s 500” index fell by 24.8%. The Democrats ultimately won, with President Barack Obama ending the Republican dominance of the White House after eight years.

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On the other hand, when the stock market recorded a negative return in the three months before the elections, the party in power lost the elections 89% of the time.

Before the 2016 presidential election, the Standard & Poor’s 500 index fell by 2.3%, and Donald Trump ultimately led the Republican Party to victory, ending the Democratic dominance of the White House after eight years.

But! Overall, this stock market rule has correctly predicted 20 of the last 24 elections, with an overall accuracy rate of 83%.

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However, the market can also be wrong, as it was during the 2020 presidential election.

The “Standard & Poor’s 500” index rose by 2.3% before the 2020 election, but the party in power, led by Trump, lost to Joe Biden. So, who will the stock market elevate from the polls to the White House? The next 80 days will be tough for Trump, and the poll numbers conducted by Harris dominate the stock markets.

For former White House communications director Anthony Scaramucci, Kamala Harris is making strong efforts in opinion polls and gaining solid ground, while Donald Trump may suffer a major defeat in the upcoming presidential election.

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Scaramucci points out that Harris‘ poll numbers are pushing the stock market trends upward, which is a good sign for the Democrats, who were previously struggling after Biden withdrew from the candidacy.

Scaramucci noted that the next 80 days will be really tough for Trump and that he needs to focus more on policy-making and differences rather than engaging in personal attacks and sharp comments, which could set him back in this race.

In recent days, Trump has launched several personal attacks through sharp statements against Biden and his vice-president Kamala Harris, focusing less on convincing Americans that his policies and leadership are suitable for the nation, according to Scaramucci.

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Anthony Scaramucci was the former communications director at the White House and has become a staunch public opponent of Trump.

Meanwhile, support rates for Harris are increasing day by day, with opinion polls in different regions of the United States revealing that she is leading Trump in several areas, including in the recent Emerson College poll, where she outpaced Trump by 4%. The Stock Market Reacts to Harris

As Harris‘ poll numbers rise, stock markets show an interesting turn, rising by the hour, with the Nasdaq Composite and Standard & Poor’s indices increasing.

Although the Democrats faced some obstacles in recent months, Harris‘ nomination helped them get back on track.

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In this regard, the paper pointed out that there is a high chance that she will win the polls.

Who is the Preferred Candidate in Terms of the Economy? Americans slightly prefer the Democratic candidate Kamala Harris to lead the U.S. economy over Republican candidate Donald Trump, according to polls published last week.

According to the poll conducted by the “Financial Times” and the “Ross School of Business” at the University of Michigan, published last Sunday, about 42% of respondents named Harris as the most trustworthy candidate to manage the U.S. economy, compared to 41% for Trump.

The magazine considers this a notable change from the six-point advantage Trump had over Biden last July.

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On the other hand, the same poll showed that 42% of Americans believe Trump will put them in a better financial situation, compared to 33% for Harris, which is the latest poll showing that the Republican candidate enjoys a significant advantage in this regard, following a poll conducted by CNBC and published a few days ago.

Harris‘ Economic Policies Although policy experts expect Harris‘ economic plan to largely reflect that of the Biden administration, with the help of former president’s economic adviser, Brian Deese, in crafting her ideas, she has yet to release a program.

However, she told reporters last week that she would present her broader “economy-centered” program this week.

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The most notable disagreement between Harris and Trump regarding the economy could be her strong disagreement with him regarding direct presidential oversight of the Federal Reserve, the U.S. central bank that sets monetary policy, including influence over interest rates, and whose governors are appointed by the president.

However, historically, the bank’s governors act independently of the executive branch.

Trump said last week that he believes “the president should at least have a say” on interest rates, while Harris affirmed that she “would never interfere” in the decisions made by the independent entity that is the Federal Reserve. How Might Stocks React to a Potential Trump Victory? Although presidential influence on stock prices is often minimal in the long term, strategists indicate that stocks in sectors such as banks and oil production are likely to benefit from a Trump boost.

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Conversely, companies that heavily rely on manufacturing in Taiwan (such as semiconductor maker Nvidia) or sales in China (such as Apple) could be affected by Trump’s policy in the region. And What About a Potential Harris Victory? If Harris wins the election, markets might initially react cautiously due to potential corporate tax increases and stricter regulations. However, some analysts suggest that markets might welcome the stability offered by a more predictable president compared to Donald Trump.