As America votes, a look back at how the market has judged the race
Nobody knows what’s going to happen, but here’s what the stock market has seen over the last year.
Let’s face it. Nobody’s really thinking about the stock market today, even though the S&P 500 is enjoying its best gains since mid-September.
Is that a clear sign that Trump is cruising to victory? After all, stocks that benefit from GOP policy positions, like private prison companies GEO Group and CoreCivic, are both enjoying a bump.
Or does it mean that Harris has the situation well in hand, as one might surmise upon seeing that large government contractors like Quanta Services and Granite Construction, which stand to gain from ongoing federal infrastructure spending, are sitting on healthy gains?
Market wizards at Goldman Sachs scoured the investable universe for such companies that could be reasonably categorized as potential beneficiaries of either Democratic or Republican policy goals. Then they lumped them into tradable baskets.
The chart of their respective performance this year, below, is a decent approximation of the thrills and spills that made this one of the most fascinating presidential races in recent memory.
As you can see, the Democratic-aligned stocks seemed to lose their advantage entirely after Biden’s disastrous debate performance, before pulling back into the lead after Biden dropped out and passed the baton to his vice president.
And like the polls, the gap between these two baskets has closed markedly over the last couple months.
But also like the polls, or the prediction markets, or whatever druidic necromancy you choose to foretell the future, nobody knows what’s going to happen. They just don’t.
That’s why the only choice we have is to sit back and wait for the votes to be counted. USA!
