Equity Markets and Presidential Popularity

This report argues that there is virtually no correlation between presidential approval ratings and equity market returns. While summer approval levels predict midterm election seat losses, these political outcomes do not dictate market direction.

Key Takeaways

• 1.There is no consistent relationship between presidential approval ratings and equity market performance; markets often run on their own cycles.
• 2.Presidential approval ratings below 30% are historically viewed as a point of no return for first-term presidents, while ratings in the 30s are reversible.
• 3.Poor presidential approval and low consumer confidence in the summer (July/August) are strong predictors of the incumbent party losing seats in midterm elections.

Table of Contents

• EQUITY MARKETS AND PRESIDENTIAL POPULARITY – HARDLY A WHIT OF CONNECTION
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