While many folks tend to tune out the political conventions, investors have been known to take notice and usually cast their monetary votes with the Republicans.
Historically speaking, the stock market performs better during the than when the Democrats gather, according to research from Sam Stovall, the chief equity strategist at Standard & Poor's/Capital IQ.
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Cause-and-effect for this phenomenon isn't so simple to determine, but the trend is pretty clear.
"Many people that I have spoken with believe that the Republicans are Wall Street’s party of choice. They regard Wall Street as being fiscally conservative, and therefore more likely to support the Republican candidate," Stovall said in an analysis. "Data since 1948 indicate that the S&P 500 did indeed perform better during and after Republican conventions, but not necessarily as a result of them."
Stovall himself ponders whether investors are more drawn to Republicans' "promissory rhetoric" regarding business, or worries that "the eloquent message to the masses from the 'tax and spend' party" would prevail. (Read More:)
Looking at performance during and one week after the respective conventions over the years, he found investor sentiment swinging to the GOP. He also factored in which group went first, as the incumbent's party gets to go second.
In the 16 elections since 1948, the S&P 500 fell nine times during Democratic conventions, including five times out of nine when they went first and four out of seven when they went second. The median price drop when the party went first was 0.66 percent and 0.46 percent when it went second.
In the five days after the convention, the index dropped 10 of 16 times, with a whopping 1.31 percent median decline when the Democrats went first against just 0.44 percent when it went second.
For the Republicans, the S&P 500 fell only five of 16 times during the convention, with a median gain of 0.32 percent. Stocks rose six of seven times when the GOP went first and five of nine times when it went second.
After the Republican conventions, the S&P 500 dropped eight of 16 times in the ensuing five-day period for a median dip of just 0.04 percent, though the market actually gained a median 0.29 percent when the GOP went first and fell 0.71 percent when it went second.
The market's most difficult years, then, came when the Democrats went first and the Republicans followed, which is not the case this year.
Stovall also found that whenever the market gained for the party that went first, it usually fell for the party that went second.
The market has been little changed thus far during the Republican convention.
"This time around, should history repeat itself, and there’s no guarantee it will, the S&P 500 will likely rise during the upcoming Republican convention and in the five days following, but then fall slightly during the Democratic convention, before resuming its upward track in the subsequent week," Stovall said.