The S&P 500 rose in the 12 months after all 19 midterm elections, by 15.6 percent on average, about twice the gain in other years. On Thursday, it closed 1.3 percent below its record, the kind of start that produced the three smallest gains.
Nineteen out of 19 is hard to argue with, but your gridlock point is the one that decides how much of it applies this time. If the mechanism is political calm rather than cheap prices, then how quickly control of each chamber gets called tomorrow matters more than the 1.3% gap to the record. The 2.9% average gain from vote to year-end is a useful anchor against anyone tempted to trade the week. One question: in the nine near-high cases, did the gains cluster in the first few weeks after the result was clear, or did they need the full year? That would tell us whether the pattern is about relief or about the policy that follows.
We didn't split the near-high nine by period, but all 19 show a clear shape. From the vote to year-end, midterm years averaged 2.9%, very close to the 2.7% for all years. The bigger gains came later: 7.8% after three months and 14.5% after six, out of 15.6% for the full year. So most of the gain arrived in months two to six, which points away from a quick relief rally and toward what happens early in the following year.
That answers my question cleanly. If most of the gain lands in months two to six, the pattern is about the policy that follows, not the relief of a result. The practical takeaway for me is to anchor on that 2.9 percent vote to year end figure and then watch what actually gets legislated in the first quarter. Trading the week around the vote looks like the wrong bet.
Nineteen out of 19 is hard to argue with, but your gridlock point is the one that decides how much of it applies this time. If the mechanism is political calm rather than cheap prices, then how quickly control of each chamber gets called tomorrow matters more than the 1.3% gap to the record. The 2.9% average gain from vote to year-end is a useful anchor against anyone tempted to trade the week. One question: in the nine near-high cases, did the gains cluster in the first few weeks after the result was clear, or did they need the full year? That would tell us whether the pattern is about relief or about the policy that follows.
We didn't split the near-high nine by period, but all 19 show a clear shape. From the vote to year-end, midterm years averaged 2.9%, very close to the 2.7% for all years. The bigger gains came later: 7.8% after three months and 14.5% after six, out of 15.6% for the full year. So most of the gain arrived in months two to six, which points away from a quick relief rally and toward what happens early in the following year.
That answers my question cleanly. If most of the gain lands in months two to six, the pattern is about the policy that follows, not the relief of a result. The practical takeaway for me is to anchor on that 2.9 percent vote to year end figure and then watch what actually gets legislated in the first quarter. Trading the week around the vote looks like the wrong bet.