Two Different Paths ahead by Comparing Historical Cases

wnd4

While looking forward technically and seasonally with regards to expected future returns, some striking comparisons have been made that suggest alternate paths ahead. The first is courtesy of BNN/Andrew McCreath, who tweeted the comparison of the S&P 500 Index performance following Trump’s win versus Reagan’s win in 1980. The chart shows that the post election day returns were given back in the month of December, eventually leading to a more prolonged decline into the new year as the enthusiasm surrounding the election faded. By the time the trend of lower-highs and lower-lows concluded, the benchmark had shed around 28% as of August 1982. Of course, the S&P 500 Index had achieved a return of around 30% by the end of November of the 1980 election year.
We present an alternate comparison. There has been two periods since 1950 when the Republicans swept the election with a newly-elected, first time president. The most recent was in 2000 when George W. Bush became president alongside a Republican dominated house and a senate that flip-flopped from democrat to republican. The market comparison between the present period and the 2000 election year is non-existent as stocks sold off following the election of Bush and the selling pressures continued through to 2002/2003, the result of a recession. The first instance of a republican sweep was realized in 1952 when Americans elected Dwight Eisenhower, alongside a republican majority in both chambers of congress. During the 1952 election year, the S&P 500 Index performance was identical to this year’s, following the same ups-and-downs between March and the end of November. Gains in 1952 continued through year-end, falling short of charting a new all-time high. The benchmark retraced its election year return in the year that followed with a loss of over 14% by September of 1953. The first few years of 1950 also offers another important comparison: it was the period when treasury yields started to turn higher following a prolonged period of depressed rates following the Depression. Similar evidence of a turn in rates is being realized now.

风行过

nice analysis

TigerFox

Does history repeat itself?