Three election tidbits.
Since 1952, no incumbent has been reelected with recession during election year.
• 2020
• 2008
• 1980
• 1960
• 1952
Since 1952, no incumbent has been reelected with a 20% stock market decline during election year.
• 2020
• 2008
The last three elections in years ending with “0” saw incumbent losses.
• 2000
• 1980
• 1960
Wednesday’s decline continues to follow the market analog if the incumbent loses his reelection bid. COVID may be blamed for today’s decline, but that’s because it is perceived that Biden will win and is more apt to have targeted closures in Q1.
I remain firm that whatever market move we see into the election, the opposite will occur after the election. And we are buying this decline.
My biggest two concerns are that smart money hedgers have gone form heavily net long to net short over the past month. Additionally, Wednesday is on target to be the second day in four days where 90% of the volume is in stocks going down. That could have some more negative implications.
Below are presidential portfolios updated through last night. Notice the shift to Biden in Wednesday’s decline.
Biden
1 weeks -3.81%
2 weeks -5.40%
3 weeks -3.67%
4 weeks +0.16%
Trump
1 week -5.35%
2 weeks -5.25%
3 weeks -5.20%
4 weeks -1.20%
