Summit Notebook

Exclusive outtakes from industry leaders

Demoplicans or Repocrats? A look at stock market performance and politics

June 9, 2008

Compiled by Thomson Reuters Proprietary Research Group

  • There have been five terms out of the last 16 where the last year of the term has a negative return on the DOW, and four of those terms have been during a Republican president’s term.
  • When we look at the previous 90 day returns before the new term, we see that the markets are generally positive (only four negative in the last 16 terms).
  • Elections are generally held in the first week of November. When we take the previous 60 day returns before the new term (from Nov. 20 – Jan. 20), we see that the DOW returns are even more positive, with only two terms out of 16 preceded by negative returns in the previous 60 days. This says that the lack of uncertainty after the elections usually give a boost to the market.
  • Only three four year terms have had negative returns. 1973-1981 (Oil crisis) and 2001-2005 (Dubya’s first term).
  • On average, the 90 days before the new term performs much better (3%) than the 90 days after the new term starts (1.1%).
  • The last three terms have started with negative returns in the first 90 days.
  • Since WW2, the Dems have had 7 terms and the Republicans have 8 (excluding the 2005-2009 Dubya term). The Dems have done slightly better (8.3% vs. 6.7%) in terms of average annualized returns over this period. However, these numbers are skewed in their favor because of the Clinton-Bubble era.

Comments

Your assessment doesn’t entail who had control of Congress..remember the Clinton years were prosperous because there was a Republican Majority in Congress..Republicans are better at the Economy when they don’t Spend like they did the last 8 years…Jeanne

Posted by Jeanne | Report as abusive
 

Why exclude the “Clinton bubble”? Would a Reagan bubble have been excluded?

Posted by Dan | Report as abusive
 

THIS WEBSITE IS WAY TO LIBERAL. UNFORTUNATLEY THIS IS THE ONLY NEWS SITE I GET AT WORK.

Posted by MICHAEL MORETTI | Report as abusive
 

This brilliant piece of research only confirms the fact that, in spite of protestations by the officeholders, the president has little to do with the economy.

Posted by Neil Jorganson | Report as abusive
 

Research shows: Only three four year terms have had negative returns. 1973-1981 (Oil crisis) and 2001-2005 (Dubya’s first term).

To that I say: Wait for it, Dubya’s second term isn’t over yet–0nly 1500 Dow points to go, an easy walk in the park.

Posted by Mike | Report as abusive
 

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