Want to know who will win the White House? Watch the stock market.Breaking News
tags: Hillary Clinton, election 2016, economics, stock market, Wall Street, Trump
Investors are a bit like gamblers: They’re either betting on future returns or folding their cards and moving to the next round of betting. And as of Tuesday these players in the U.S. stock market seem to be placing their chips on the prospect that Republican candidate Donald Trump will inherit the keys to the White House.
For those who have nightmares thinking about Trump’s commanding an army, starting trade wars and redecorating the Oval Office, this market sentiment is nothing to dismiss. The performance of U.S. stocks has predicted the outcome of presidential elections more than 80 percent of the time in every election since World War II, according to market analysts who have studied the correlations between stock prices and presidential election outcomes.
If U.S. markets are down in the three months ahead of Election Day, the incumbent party tends to lose. And right now the Dow Jones Industrial Average of 30 major American companies and the broad S&P 500 have declined 1.4 percent and 1 percent, respectively, since the start of August.
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