Presidential campaigns and elections are market-moving events. So, I've been keenly watching campaigns since 1976 when I was about to launch my investment career. That's four decades, 11 presidential elections, most with similar themes and divisions.
But not this year. The Hillary Clinton-Donald Trump contest is one of a kind. And that makes me wonder whether some long-standing trends related to elections will continue.
It's been well publicized that the market's direction between July 31st and October 31st has been a reliable but not infallible predictor of who will win the election.
Well over 80 percent of the time, since the Roosevelt-Dewey race of 1944, when the market is up during those three months, the incumbent party wins, and when it's down, voters support a change.
At the end of last week, the S&P 500 was down about 1.9 percent since the end of July. If this decline holds through Oct. 31, the market would signal a Trump win.
I should point out, however, that in two of the three instances when the market predictor was wrong, in 1968 and 1980, a third party candidate was involved. (The third time, in 1956, a surprise geopolitical event – the Suez Crisis – occurred just before the election.)
So, with Libertarian Gary Johnson polling about 8 percent and Jill Stein of the Green Party at 2 percent, third party candidates could certainly frustrate the predictive powers of the market this time around.