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U.S. stocks are down by 3.2% since August 8. It appears that stock market behavior is counting against Democrat Hillary Clinton.
Since 1984, the S&P 500 Index signals the outcome of presidential race in United States, which was backed by Strategas Research Partners LLC. Prior to the election, American equity benchmark had a three-month gain. Conclusively, since 1928, the incumbent party won 86 percent of the time.
Since August 8, benchmark gauge is down to 3.6 percent. Until the election begins, it is fact that the trend points to Donald Trump’s win.
On Tuesday, S&P 500 also declined by the most in three-week streak apart from three-month interval. It slipped to 2,111.72 for a sixth day, which made its fall less than 2,100 since July 7 before recovering.
Since August 2015, the benchmark gauge encountered its longest slip in the midst of tightening presidential race.
The same day S&P 500 slipped caused surge of CBOE Volatility Index by nine percent to its maximum since June 27.
The power of the stock market to foresee the future is obtained from its economical sensitivity. Consumer discontent and falling shares correlate with one another and point to Clinton’s challenger.
Though the stock market signals to weaker ones, it brings slugging gross domestic product growth and biggest loss of consumer confidence.
Federal Reserve stimulus is assumed to be the driving force in making stocks less reliable signal for economic status, stated by analysts.
Strategas Research Partners Head of Policy Research, Daniel Clifton, stated that people are pointing to Clinton as the winner, but their actions do not show. Their money is not placed to work due to Brexit-like fear.
In June, efforts on injuring politics by markets reputation ended in June, particularly when pre-U.K. referendum caused stocks to soar.
The chances of tightening central bank this year will increase more than 70 percent with Fed rate intentions to contribute.
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