The massive market transformation this month that some on Wall Street called a "once in a decade opportunity" might have just been a one-off technical move because of taxes.Marketsread more
The Pentagon will deploy U.S. forces to the Middle East on the heels of the attack on Saudi Arabian oil facilities, United States Secretary of Defense Mark Esper announced...Defenseread more
CNBC did a deep dive through the most recent Wall Street research to find stocks that analysts say are underappreciated.Marketsread more
Shares of MasterCard are up 46% this year, and 1120% since 2011, getting a boost from the strong U.S. consumer.Investingread more
CNBC sat in on an "empathy training" at Amazon PillPack's Somerville offices, which is part of new hire orientation.Technologyread more
Trade with China is the 'big unknown' for the Federal Reserve as it decides how best to support the U.S. economy, says Council on Foreign Relations Director of International...Futures Nowread more
Lobbying experts said the visit is likely an attempt to be in lawmakers' ears as they consider legislation that would impact Facebook.Technologyread more
Yardeni Research's Edward Yardeni believes the U.S. economy is picking up steam.Trading Nationread more
Iran's audacious drone and cruise missile attack on Saudi Arabia's oil producing facilities has provided a critical test yet for the Trump administration's foreign policy. A...Politicsread more
Chinese trade negotiators suddenly canceled a visit to meet U.S. farmers after they wrapped up trade talks in Washington this week.Marketsread more
One way to tell which way the stock market is heading may be just to watch how the presidential polling goes.
Should Donald Trump shake off his recent slump and pull ahead in the race, the market will fall, according to one analysis of recent trends. Conversely, then, should Hillary Clinton continue to lead, that would push the market higher if the findings hold true.
Macroeconomic Advisers set out to study the correlation between stock prices and which candidate was leading in the polls. It used as its benchmark Nate Silver's FiveThirtyEight tracking, which runs election simulations based on polls and economic conditions.
The firm then translated those terms into the trend of the equity risk premium, or the extra return on stocks that investors demand over a low-risk investment like bonds.
As of Thursday afternoon, the FiveThirtyEight "polls-plus" measure of who would win today gives Clinton a 74.8 percent chance of victory to Trump's 25.2 percent, the biggest gap since Aug. 25. However, the Macroeconomic Advisers measure was taken from the Sept. 30 close, which showed Clinton with a 64 percent chance.
The nuts and bolts breakdown for technical analysts is that if Clinton holds her lead to Election Day, the equity risk premium will fall from 3.55 percent to 3.45 percent, equating to a 4 percent rally. If Trump's fortunes turn around, the premium would rise to 3.73 percent, correlating with a 7 percent decline. (A higher risk premium indicates anticipation of more market volatility.)
"We've been tracking the correlation between the possible election outcomes and movements in the part of the stock market that's associated with risk appetite," said Joel Prakken, senior managing director of Macroeconomic Advisers. "Looking for the last several months at the daily variations ... there's been an inverse correlation between the probability that Trump wins the election and stock prices."
The findings aren't terribly surprising or unusual. A New York Times examination of what might happen to the market during election season, using different methodology, found a Trump victory would trigger a 10 to 12 percent drop in the market.
It's also consistent with historical patterns and isn't peculiar to the Clinton-Trump race.
Since the end of the World War II, when the market fell in the three-month period heading into the election, the incumbent party lost 86 percent of the time, according to Sam Stovall, chief equity strategist at CFRA Research.
Getting at why is a little trickier. Trump, after all, is a businessman who has dabbled in the market, on top of representing a Republican Party that is supposed to be friendlier to business interests and Wall Street culture.
However, Prakken suspects the market is leery of the changes Trump would bring, as opposed to the stay-the-course posture that's more likely under a Clinton administration.
"You have a candidate who's a little erratic, and policy prescriptions that are at odds with long-running Republican orthodoxy," Prakken said. "Some analysts suggest those policies would be quite detrimental to the economy."
Indeed, Wall Street is betting on Clinton. The Democratic nominee has pulled in a whopping $58.6 million from finance-related contributors, compared to Trump's $557,480, according to the Center for Responsive Politics.