Kamala Harris will win, according to Stock Market Election Indicator: Newsweek

Photo: Vice President Kamala Harris (L) and Second Gentleman Doug Emhoff acknowledge supporters during a campaign rally at the Craig Ranch Amphitheater in Las Vegas, on October 31, 2024. According to the “Presidential Predictor,” based on the performance of the S&P 500, Harris is set to win the 2024 election

Vice President Kamala Harris will win the 2024 presidential election, at least according to one longstanding indicator based on market performance.

Known as the “Presidential Predictor,” this stock-market-based method has successfully forecast the outcome of 21 of the past 24 elections.

In 2020, it signaled a win for Joe Biden. According to current trends, the predictor favors a win for the Democratic Party and Harris.

What Is the ‘Presidential Predictor’?

The Presidential Predictor’s underlying principle is straightforward: when the S&P 500 index rises in the final three months before the election, the incumbent party typically remains in office. Conversely, a drop in the index has historically indicated that the opposition will claim victory.

In 12 out of 15 elections since 1928, the ruling party has benefited from a strong stock market performance in the three months leading up to the election and went on to win.

And when the stock market declined, the incumbent party lost in eight out of nine cases, giving this trend an 83 percent accuracy in predicting election outcomes, LPL Financial’s chief technical strategist Adam Turnquist says.

Traditional polling usually serves as the foundation for most election forecasts, the Presidential Predictor provides an additional lens, one grounded in investor confidence and broader economic performance.

What Do the Markets Say?

The S&P 500 has demonstrated significant strength in recent months, with the index steadily climbing since August.

This bullish performance is reflected in the rise of other indicators like the Dow Jones Industrial Average, which reached record highs recently.

Based on the system’s underlying principle, Harris is set to claim the White House.

The S&P 500’s prediction is not without skeptics. Some experts caution that economic and political landscapes have shifted in ways that could complicate the predictor’s accuracy.

“There is no simple, or complicated, economic model that predicts perfectly whether the incumbent’s party will win a presidential election,” Jay Ritter, professor of finance at the University of Florida’s Warrington College of Business, told Newsweek.

DJ IA index monthly performance

“In general, when the economy is doing well, voters are satisfied and will not tend to ‘throw the bums out.’”

“Even if a model has worked in the past, that does not guarantee that it will work in the future,” Ritter cautioned.

S&P 500 last 6 months with BB and RSI

“It used to be the case that the religion of a candidate mattered more than it does today, with Protestants having an advantage. A substantial share of Americans today cannot tell you what religion Joe Biden is, or what religion Kamala Harris is.”

Nasdaq performance

Ritter added: “When it comes to presidential elections, I would say that the stock market has about the same forecasting ability: better than nothing, but not a whole lot better.”

Newsweek