Stock investors, don’t despair if Donald Trump wins A new four-year cycle is about to begin...

Market Watch ^ | Sept 20, 2016 6:11 a.m. ET | Mark Hulbert

[expat_panama]

CHAPEL HILL, N.C. (MarketWatch) — I’ll start with the bad news: The fourth year of the presidential election-year cycle is about to end, and year No. 1 of a new cycle is about to begin.

And you can only guess what that means.

But there also is some good news: What you know about the first year of the cycle is most likely wrong: First years do not automatically spell doom.....

...two features of that record that suggest we shouldn’t write off the stock market’s near-term prospects. First, as you can see in the chart at the top of this column, there is considerable quarter-to-quarter variation...


...second relevant feature of the historical record that is particularly relevant to this coming election: The first-year tendencies of the stock market depend crucially on whether the incumbent political party...

Quarter of presidential cycle year #1 Average Dow gain when incumbent party wins Average Dow gain when incumbent party loses
1 +7.3% -1.0%
2 +1.4% -2.3%
3 +2.8% +6.6%
4 +1.6% +0.4%

As you can see, the Dow does much better in quarters one and two of the first year of the presidential term when the incumbent party wins. But, then, this pattern at least partially reverses itself...


....the stock market is likely — for a few months at least — to do better if Democrat Hillary Clinton wins. If Republican Donald Trump wins, in contrast, it would likely take the market longer to find its bearings — but would eventually figure out how to survive and even prosper under his administration.

[expat_panama]

They point out that if the incumbent party losses while the market falls, but they don't seem to mention that it may be the market that's causing the election and not the other way around.

[expat_panama]

Good morning!  The pundits are saying everyone's worried about the Fed, but stock price trends look like traders are fast asleep.  The S&P moved zero% yesterday and today futures see maybe +0.2%.  Those same futures traders see metals +1.07% although gold & silver prices haven't budged since yesterday ($1,315.70 and $19.26).

Our bean counters got a slow day today too w/ just Housing Starts and Building Permits before the bell and they go home.

Pundits are busy tho:

Will Rotten Politicians Kill Bull Market? - Anthony Mirhaydari, Fiscal Times
Why Brexit Could Be a Warning for American Voters - Holly Ellyatt, CNBC
'Deplorables' and the Myth of the Single-Issue Voter - Megan McArdle, BV
Why Executives Tiptoe Around Donald Trump - Andrew Ross Sorkin, NYT
Fed Poised to Cut Interest Rate Forecast Again - Spicer & Saphir, Reuters
How Low Interest Rates Became the New Normal - Clive Crook, Bloomberg
Here's One Big Reason Fed Can Wait to Raise Rates - William Watts, MW
Historical Elegance of the Fed and Jackson Hole - Peter Conti-Brown, L&L
Black & White Wage Gap Worst in Nearly 40 Years - Tanzina Vega, CNN
'America's Raise' Ignores Real Story of U.S. Income - John Tamny, RCM

[MeneMeneTekelUpharsin]

The big boys who all have connections and schemes in place ARE about to get upset. NEW connections have to be made to rip everyone off and that takes a lot of money and time.

[Wolfie]

I guess that’s good, but if the stock market is just pumped up fluff that doesn’t reflect the health of the real economy (as it is now), then it’s just a longer fuse on the inevitable crash.

[Caipirabob]

It will be the usual thing. Bankers will manipulate and crash the market, the left will scream about Trump and smart investors will pick up some great bargains. I'm ready to shop...

Unless illary wins, in which case I plan on a long hybernation and a massive amount of "non-participation" in the misery to follow.

[citizen]

Will Rotten Politicians Kill Bull Market? - Anthony Mirhaydari, Fiscal Times

I can't consider a market propelled almost entirely by the nearly decade-long FED tampering via QE#, ZIRP, NIRP & rollovers as a BULL market.

Past market cycles were largely the reflection of the health of US & world business environment.

Past markers don't apply in the current era.

[citizen]

In this article - How Low Interest Rates Became the New Normal - Clive Crook, Bloomberg - Crook finally gets to the crux of the matter toward the end:

---

...deeply negative interest rates (which in turn might require REQUIRES the abolition of paper money to prevent hoarding).

---

That looks like their eventual plan where all your wealth (including tangibles) is expressed monetarily in digital form and will be accessible to government confiscation via your friendly bank as required. This includes fees, regulations & services by your bank, as banks are increasingly becoming less independent and more a tool of government.

They slap an important sounding term on it like "negative interest rates" and then help themselves to what they need. This year's NIRP might be 1%. If conditions continue to worsen, next years NIRP might be 3%.

[Jack Hammer]

If The Donald knows anything, he knows business; the government needs to get its all-destroying tentacles out of commerce or we’ll end up as a larger version of Venezuela.

That’s what obama wants, and it’s that toward which he’s been working these seven years.

A hillary administration will only complete the destruction obama began.

[ckilmer]

I expect Trump will win so that means the next couple months will be negative for the stock market.

That’s in line with most of the prognosticators I listen to.

[expat_panama]

...negative interest rates ...   ...REQUIRES the abolition of paper money to prevent hoarding...

People have hoarded what they have needed for hundreds of thousands of years and no gov't policy can change that.   The gov't can stop printing money and folks will immediately stash what they got and any new earnings will get spent on the next cash equivalent hoard.   Hoarding's been happening more than normal these past few years and it's the reason inflation's been low, and this won't change until people decide that sending's become worthwhile again

[citizen]

...the next cash equivalent hoard.

Hmmm...whatever it is, I’m sure I won’t have any of it.