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Mid-Term Election Year & Market Performance

As the mid-term elections get underway, here is a look at how the markets historically performed during a mid-term election year.

Mid-term election years tend to be positive for the markets in Q4.

In a mid-term year the Dow had a positive Q4 85% of the time, with an average gain of 6.2%.

  • Best mid-term Q4 performance was in 1998 when the Dow rose 17.1%
  • Worst mid-term Q4 performance was in 1930 when the Dow fell -19.7%
  • Note since 1930, the average annual return for midterm years for the Dow is also positive with an average gain of 4.45%

In a mid-term year the S&P has a positive Q4 85% of the time, with an average gain of 6.3%.

  • Best mid-term Q4 performance was in 1998 when the S&P rose 20.9%
  • Worst mid-term Q4 performance was in 1930 when the S&P fell -17.5%
  • Note since 1930, the average annual return for midterm years for the S&P is also positive with an average gain of 4.06%

In a midterm year the NASDAQ has a positive Q4 66% of the time, with an average gain of 8.5%.

  • Best mid-term Q4 performance was in 1998 when the NASDAQ rose 29.4%
  • Worst mid-term Q4 performance was in 1978 when the NASDAQ fell -11.2%

4th Quarter Performance when October is a Positive Month:

  • The Dow posted its best October since 2006 when it gained 3.44%
  • When October is positive, the Dow closes in positive territory at the end of Q4 81% of the time by an average increase of 6.14%
  • The S&P posted its best October since 2003 when it gained 5.5%
  • When October is positive, the S&P closes in positive territory at the end of Q4 85% of the time by an average increase of 5.96%
  • The NASDAQ posted its best October gain since 2003 when it gained 8.13%
  • When October is positive, the NASDAQ closes in positive territory at the end of Q4 85% of the time by an average increase of 12.68%

3rd Quarter Performance when July is a Positive Month: (Data back to 1896 for the Dow, 1928 for the S&P and 1973 for the NASDAQ)

  • When July is positive, the Dow closes in positive territory at the end of Q3 80% of the time by an average increase of 5.57%
  • When July is positive, the S&P closes in positive territory at the end of Q3 83% of the time by an average increase of 7%
  • When July is positive, the NASDAQ closes in positive territory at the end of Q3 90% of the time by an average increase of 7.6%

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