How stocks perform on, and after, Election Day

ByGary Kaltbaum

By Mark DeCambre, MarketWatch

S&P 500 tends to rise on Election Day, then loses ground

The race for the White House will come to a historic conclusion on Tuesday.

Wall Street has been a whirling dervish of anxiety, tied to the vacillating probabilities that Republican candidate Donald Trump will beat Democratic rival Hillary Clinton on Nov. 8 and insert a hefty dose of uncertainty into the economy.

Read:What happens after the S&P 500 falls 9 days in a row? (http://www.marketwatch.com/story/what-happens-after-the-sp-500-falls-9-days-in-a-row-2016-11-04)

Check out MarketWatch’s snapshot:

The stock market’s Election Day performance in real tim (http://www.marketwatch.com/story/us-stock-markets-stuck-in-nervous-wait-as-election-day-begins-2016-11-08)e

But as unpredictable as this election run has been, researchers at Bespoke found that stocks have been fairly predictable after the election, tending to sell off. U.S. equities have risen only about one out of every three times since 1928, according to Bespoke data, tracking S&P 500 index returns on the days after a U.S. presidential election.

Dow Jones’s data team says the average change on the day after Election Day is negative 0.9%, with the top 5 declines arriving in the wake victories by Democratic presidents (see table below):

Election Winner            Election Day  % change day after Election Day
Barack Obama (D)           11/4/2008     -5.27
Harry S. Truman (D)        11/2/1948     -4.61
Franklin D. Roosevelt (D)  11/8/1932     -4.42
Franklin D. Roosevelt (D)  11/5/1940     -3.32
Barack Obama (D)           11/6/2012     -2.37
George W. Bush (R)         11/7/2000     -1.58
Jimmy Carter (D)           11/2/1976     -1.14
Dwight D. Eisenhower (R)   11/6/1956     -1.03
Ronald Reagan (R)          11/6/1984     -0.73
William Clinton (D)        11/3/1992     -0.67

To be fair, Dow Jones data also show that three of the five biggest gains have come following wins by Democrats, including a 1.5% rise after Bill Clinton’s second-term victory Nov. 5, 1996, and a similar jump for Franklin D. Roosevelt on Nov. 3,1936, representing a landslide victory and the second of four terms for Roosevelt.

Election 2016:Live results and updates as voters go to polls to pick Clinton or Trump (http://blogs.marketwatch.com/capitolreport/2016/11/08/election-2016-live-results-and-updates-as-voters-go-to-polls-to-pick-clinton-or-trump/)

Read: Here’s how the stock market performs from Election Day through Inauguration Day (http://www.marketwatch.com/story/heres-how-the-stock-market-performs-from-election-day-through-inauguration-day-2016-11-08)

Tracking performance on Election Day is a little trickier because between 1932 and 1980 it was designated a market holiday. For returns including 1928 and from 1984 to the present, however, returns have been positive about 78% of the time (see table attached):

Check out:Clinton relief rally for the stock market may be short-lived, analysts say (http://www.marketwatch.com/story/will-the-clinton-relief-rally-for-stocks-last-what-analysts-say-2016-11-07)

Of course, the vagaries of this election cycle has been tough on investors, as stocks staged a monster rally on Monday, following news that Federal Bureau of Investigation Director James Comey concluded that newly discovered emails hadn’t changed his conclusion that charges against Clinton aren’t warranted (http://www.marketwatch.com/story/fbi-review-of-clinton-emails-hasnt-led-to-new-findings-chaffetz-says-2016-11-06) for her use of a private email server when she was secretary of state.

Read:This would be the worst possible election outcome for the stock market (http://www.marketwatch.com/story/an-unclear-election-result-would-be-worst-outcome-for-stocks-2016-11-05)

The Dow Jones Industrial Average closed up around 370 points Monday, while the S&P 500 rose 2.2% to 2,131 and the Nasdaq Composite Index advanced 2.4% at 5,166. For the Dow it was the best rally before Election Day since 1932 (http://www.marketwatch.com/story/dow-industrials-just-had-the-best-rally-before-election-day-in-84-years-2016-11-07).

Read: These 5 charts show the global relief rally after FBI clears Clinton–again (http://www.marketwatch.com/story/these-4-charts-show-the-global-relief-rally-after-fbi-clears-clinton-again-2016-11-07)

-Mark DeCambre; 415-439-6400; [email protected]

(END) Dow Jones Newswires

11-08-161326ET