Trading days around US presidential elections

How does the UK market trade in the days around US presidential elections?

US presidential elections are held every fours years on the Tuesday following the first Monday in November (hence they are always between 2nd and 8th November). The newly elected president takes office at midday on Inauguration Day (20 January the following year).

In 2016 the US presidential election will take place on 8 November.

The table below shows the results of analysing the FT All-Share index for the 9 days around each US election since 1972.

  • Days 1-4: are the four trading days leading up to the election
  • Day 5: is the election day
  • Days 6-9: are the four trading days following the election
Day 1 2 3 4 5 6 7 8 9
Proportion of days up(%) 45 73 64 55 64 55 45 55 45
Average daily return(%) 0.56 0.33 0.39 0.36 0.64 -0.18 -0.49 0.29 -0.39
Standard deviation 2.45 0.66 1.11 1.05 1.35 0.95 2.09 1.17 1.28

The average return for each day is shown in the chart below.

FTSE All-Share around US presidential elections [1972-2012]

As can be seen, the UK market tends to trade stronger in the four days before the election, and is weaker in the few days following the election. The strongest day of the period has been the election day itself.

The above is an extract from the Harriman Stock Market Almanac.

See also: other articles on politics and markets.

Social Share Toolbar

Comments are closed.