More on presidential indicators — This time, using the stock market:
“Past performance is not a reliable indicator of future returns. That’s good news for President Bush, because if past stock-market patterns hold true this year, he will lose his bid for re-election in November.
Presidential elections are usually won by the incumbent party; in the past 104 years, in 26 elections, the party holding the White House has lost it only 10 times.
But those incumbent losses have been heralded every time by poor stock-market performance, either in the four years leading up to the election or in the last year before the election, according to recent research by Ken Tower, chief market strategist at CyberTrader, a unit of Charles Schwab.”
While this is an interesting approach, readers of this blog should be well acquainted with my general disdain for controlling for a single variable on complex problems.
Other considerations are also at play: Beyond the problems in Iraq, and issues of credibility, “Wage growth has been slow since the 2001 recession, while prices for food and energy have lately skyrocketed. Many voters are only vaguely aware of the stock market’s health at any given time, but they are constantly aware of their wages and what they have to pay for gallons of milk and gasoline.”
Its not all bad news for the incumbent: “there has lately been good news for the president — the University of Michigan’s consumer sentiment index rose in June, and the latest weekly ABC/Money consumer comfort index also rose from a very low level, led by improving confidence among Republicans and some independents. ”
The race continues to be utterly fascinating . . .
Stocks point to Bush loss?
If history is any guide, Bush needs a summer rally — but history may not be such a great guide.
June 23, 2004: 4:55 PM EDT
By Mark Gongloff, CNN/Money senior writer