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1st Five Months Election Year Dow Up 2%; Clinton Beats Trump?

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This article is published in collaboration with Scutify, where you can find real-time markets and stock commentary from Robert Marcin, Cody Willard and others. Download the Scutify iOS App, the Scutify Android App or visit Scutify.com.

Political, economic, fundamental and technical crosscurrents continue to plague the stock market. On the positive bullish side of things the Dow and S&P have posted gains for the first five months of this election year. In election years when the first five months have been positive it has been an indication that the incumbent party retains the White House. And when the incumbent party stays in power the market has performed better for the full year.

Hence we can deduce that the market expects Hilary Clinton to win and that will be just fine, because it will mean a likely continuation of the same or similar policies and agenda as under the Obama administration, providing a greater degree of certainty as to what to expect from Washington. With Donald Trump as a political newcomer, running an unpredictable campaign, Wall Street can't possibly have a clue as to what a Trump administration would do and mean for the market.

If Trump begins to gain traction and the Clinton and Sanders continue to divide the Democratic Party, the market may falter in fear of an uncertain and unpredictable presidency. Today's sell off, though intraday losses were pared, is an illustration of how fragile this bull is. This very volatile May is up for the month across the board, ending on a less the stellar note and NASDAQ remains in the red for the year.


This article was written by Jeff Hirsch for Almanac Trader on May 31, 2016.

This article published in collaboration with Scutify, the best app for traders and investors. Download the Scutify iOS App, the Scutify Android App or visit Scutify.com.

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