In a note to Bespoke Premium clients yesterday, we looked at the performance of the S&P 500 on Presidential Election Days and the day after since 1984 when the equity market was first open for trading on the day of Presidential elections. What we found was that while the day of the election has historically been positive for stocks, the day after has been notoriously weak.
With the S&P 500 down more than 1% this morning, the current cycle is following the typical trend of positive Election Days and weakness the day after. In fact, since 1984, today is only the second time that the S&P 500 has been down more than 1% in the first half hour of trading on the day after the election. The only other occurrence came in 2008 when President Obama was elected to his first term. While the President has enjoyed one of the better overall stock market runs since his inauguration, the knee jerk reaction from investors following both of his elections has been negative.