ChainlinkTime

US stocks tend to rally following Midterm elections: The S&P 500 has returned +17.2% on average in the year following Midterm elections since 1950, the strongest return of any year in the Presidential cycle. The index has finished higher in 17 of the 19 post-Midterm years during this period. This is also nearly quadruple the +4.6% average return recorded during midterm years, when the index finished higher in 11 of 19 years. By comparison, the S&P 500 has returned +8.1% on average in Year 4 of the Presidential cycle, or during Presidential election years, ending higher in 16 of 19 years. In Q4 of Midterm years, the S&P 500 has delivered an average return of +6.6% since 1950, the strongest quarterly return of the Presidential cycle. History suggests US equities will extend their rally after Midterm elections.

This aged well. 3 hours into the supposed "Black Monday" stock market crash and Nasdaq 100 futures are now up nearly +1%. The S&P 500 is set to add +$350 billion in market cap at the open again. As we stated 24 hours ago: Ignore the noise.

The initial response to this article has been incredible. The S&P 500 is now <1% away from a record high but 206 of its components are down over -30%. Never in history has this happened before. It's the "Bear-Bull Market Paradox." Bookmark this.