Stock markets hate uncertainty, which is why the historical tendency has been that an incumbent party win is the most positive for stock markets in an election year, while an incumbent party loss the most negative.
So what is the most likely outcome currently, and what should investors pay attention to over the next six weeks?Since 1952, no president has ever been re-elected when there was either a 20 per cent decline in stocks or a recession in the election year. This year we had both. Market commentators point to this statistic and close their forecasts, concluding that Mr Trump will lose.
Mr Trump's approval ratings at mid-year were the lowest of any president in modern times, at just 38 per cent. No president has ever been re-elected with ratings this low. If positive the incumbent has won a majority of the time. If negative the incumbent has lost most of the time.