Chart of the Day - Monday, August 3rd, 2020

Today’s Chart of the Day was shared on Twitter by Ryan Detrick of LPL Financial Research (@RyanDetrick). To be clear, this is for analysis purposes only and is not an endorsement for either political party. With three months until Election Day, Ryan points out that the stock market has a pretty solid track record at predicting the outcome of US Presidental Elections. When the S&P 500's three-month performance has been positive heading into the election, the sitting President has historically been re-elected. On the other hand, when the three-month performance has been negative, the sitting President tends to get the boot. There have been three exceptions to this phenomenon in 1956, 1968, and 1980. But overall, the S&P 500's three-month performance has correctly predicted 20 of the past 23 elections since 1928 for an impressive 87% success rate. It's worked particularly well in recent decades, as it has been correct every single election since 1984. Will the S&P 500's performance over the next three months once again predict the winner? For more on this phenomenon, check out this note from LPL Financial Research.