If you want to get a feel for how the US presidential election will play out, then Byron Wien, Blackstone’s vice chairman, has a suggestion: Look at stocks. The incumbent party usually wins if the stock market is doing well, Wien said in a webcast on Thursday. Conversely, if the stock market is doing poorly, then the challenger usually wins. “There’s a correlation between the outcome of the election and the market,” Wien said, citing the polling before recent results on Florida and Ohio. “Hillary had at least 70% probability of winning with the market doing relatively well.” Wien, it should be noted, has donated to the Clinton campaign – as well as those of other Democratic candidates in the past. So that 70% figure might be taken with a grain of salt.But he’s not the only one to observe the correlation between markets and election outcomes. Wien’s theory is based on the historical performance of the S&P 500 three months before the presidential election. Since the 1920s, the incumbent party usually wins when market returns are high. But Wien cautioned that it doesn’t work out perfectly, as shown in the blips in 1956, 1968, and 1980. When the country… Read full this story
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BYRON WIEN: Stock markets can predict US elections, and this one points to a Clinton victory have 375 words, post on www.businessinsider.sg at July 14, 2016. This is cached page on CHUTEU. If you want remove this page, please contact us.