Every four years, the world’s attention turns to the political spectacle that is the US presidential election. Key issues affected by this election include healthcare, immigration, trade policies, taxes, climate change, the Supreme Court composition, and foreign relations. Voters are inundated with exclamations about how the results of the upcoming election carry high consequences. With the widening gap in views between political parties, perhaps the election truly will drive generational change.
In this paper we look to history to provide some context to the election’s impact on financial markets and the economy. We recognize that the data set for presidential elections is relatively small, given that elections are held every four years. That being said, there are some historical relationships among elections, markets, and the economy that we can observe.