Broker Check

Midterm Elections and Stocks: Friends or Foes?

September 24, 2018

2018 continues to be a solid year for U.S. equities, even in the face of many well-documented concerns (we’re looking at trade worries and the flattening yield curve here). Want some good news? The calendar may quickly become a bull’s best friend.

“How do you make a bull smile? Tell him that the next three quarters are historically some of the strongest out of the entire four-year presidential cycle,“ said Senior Market Strategist Ryan Detrick.

As our LPL Chart of the Day shows, going all the way back to when the Dow started trading in 1896, each of the next two quarters have closed higher 73.3% of the time—no other quarter is up more often. In addition, the average returns over the next three quarters have been 4.0%, 5.2%, and 3.6%—again some of the strongest in the four-year cycle.

The Next Three Quarters are Historically Bullish for Stocks

For more of our thoughts on the performance of stocks over the presidential cycle and what could happen around the midterm elections, be sure to read out latest Weekly Market Commentary,due out later today.


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