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It looks like investors may have already picked the next president—Wall Street is betting against Donald Trump and the market is responding.
“The market appears to have decided not only that [Hillary] Clinton will win, but that it won’t be close,” says David Woo, a strategist at Bank of America Merrill Lynch. “Investors like landslide victories.”
According to an S&P Global Market Intelligence analyst, Wall Street has a record of predicting future presidents. Since the early 1940s, the presiding president or party was re-elected 82% of the time when the S&P 500 rose between July 31 and Oct. 31.
Woo said the S&P 500 has risen more than 4% since July 5, the day marking the 90-trading-day countdown to the Nov. 8 presidential elections, MarketWatch reports. He also said that during years when a presidential candidate won by more than 80% of Electoral College votes, the S&P 500 reported average returns of over 8% in the 90 days prior to the election.
The last time stocks beat the current rally was when Ronald Reagan beat Walter Mondale in his 1984 landslide victory. [MW]
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