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Stock Market Returns by Political Regime

by: Mathew Britt, CMT

With the 2020 election just weeks out, some investors are worrying about the pros and cons of a Trump vs. Biden presidency.

A Democratic sweep would almost certainly mean a rollback of Trump’s corporate tax cuts, which would be a negative for stocks, but additional economic stimulus and stability on the China trade front would be a big positive.

Truth be told, the stock market performs the best when there is gridlock between the Whitehouse and congress. Going back to 1950, the S&P 500 Index has performed the best under a Democratic president and Republican congress and second best under a Republican president and split congress.