{"id":70279,"date":"2023-10-08T16:48:02","date_gmt":"2023-10-08T20:48:02","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/what-the-stock-market-selloff-means-for-bidens-re-election-chances\/"},"modified":"2023-10-08T16:48:05","modified_gmt":"2023-10-08T20:48:05","slug":"what-the-stock-market-selloff-means-for-bidens-re-election-chances","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=70279","title":{"rendered":"What the stock market selloff means for Biden\u2019s re-election chances"},"content":{"rendered":"
\n

The stock market is a terrible political prognosticator. That\u2019s important to remember as a counter to those who view the market as a political barometer, but many financial websites nonetheless post scoreboards showing how stocks have performed during various presidencies.<\/p>\n

Some financial analysts have taken the U.S. stock market\u2019s current weakness to mean that President Joe Biden\u2019s re-election chances are fading. Try as I might, I can find no statistical support for the notion that a president\u2019s odds of being reelected are correlated with stock market performance.<\/p>\n

\n

Consider how the U.S. stock market has fared in calendar years immediately prior to presidential elections. Since the market is forward looking, discounting the economy several quarters hence, you might think that the market\u2019s prior-year performance would be a good predicter of the incumbent party\u2019s odds of retaining the White House. Not so. There is no statistically significant correlation between those odds and the Dow Jones Industrial Average\u2019s
\n DJIA
\n return in those prior years.<\/p>\n

If Biden\u2019s odds of being re-elected are falling, we can\u2019t say it\u2019s just because the stock market is struggling. I reached the same conclusion when correlating the stock market\u2019s return during election years and the incumbent party\u2019s odds of retaining the White House.<\/p>\n

I next searched for correlations between the stock market\u2019s shorter-term gyrations and Biden\u2019s re-election odds as reported on PredictIt.org, the electronic predictions market. Once again I found no statistically significant correlations. Sometimes his odds fell in lockstep with the market, but sometimes it was just the opposite \u2014 with no overall pattern.<\/p>\n

We shouldn\u2019t be surprised by these results, according to Campbell Harvey, a Duke University finance professor. In an email exchange prior to the 2020 election, he wrote that \u201cthe sample [of past Presidential elections] is too small and there are hundreds of variables,\u201d making it very difficult to come up with any conclusion that has genuine statistical significance.<\/p>\n

I want to emphasize that my analysis is non-partisan. Prior to then-president Donald Trump\u2019s re-election effort, at a time when the stock market was reeling from the Covid-19 pandemic, I also argued that there is no correlation between the stock market and an incumbent\u2019s chances of winning re-election. At that time I was accused of being pro-Trump. No doubt after this column I will be accused of being pro-Biden.<\/p>\n

Neither is the truth. Instead, my advice is to keep your politics and your investments separate.<\/p>\n

Mark Hulbert is a regular contributor to MarketWatch. His Hulbert Ratings tracks investment newsletters that pay a flat fee to be audited. He can be reached at <\/em>mark@hulbertratings.com<\/em><\/p>\n

Plus:<\/strong> What McCarthy ouster means for markets as investors fret over congressional \u2018dysfunction\u2019<\/p>\n

Also read: <\/strong>Biden and Trump are pushing dangerous trade tariffs that will hurt American jobs<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The stock market is a terrible political prognosticator. That\u2019s important to remember as a counter to those who view the market as a political barometer, but many financial websites nonetheless post scoreboards showing how stocks have performed during various presidencies. Some financial analysts have taken the U.S. stock market\u2019s current weakness to mean that President […]<\/p>\n","protected":false},"author":1,"featured_media":70280,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-70279","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nWhat the stock market selloff means for Biden\u2019s re-election chances | iFintechWorld<\/title>\n<meta name=\"description\" content=\"The stock market is a terrible political prognosticator. 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