SAN FRANCISCO (Reuters) - U.S. President Donald Trump has warned that his favorite measure of success, the stock market, is imperiled if voters favor Democrats in next week’s congressional elections.
While not fully accurate - stocks tend to rise regardless of who controls the government - it does bear out that the market has delivered a slightly stronger performance on average when Republicans dominate in Washington.
A Reuters analysis of the past half century shows stocks fared better in the two calendar years after congressional elections when Republicans control Congress and the presidency than when Democrats controlled the two branches, and at least as well as during times of gridlock. Many investors are now hoping for a continuation of the Republican agenda.
“There is Trump ‘the person’, who is very controversial,” said Stephen Massocca, Senior Vice President at Wedbush Securities in San Francisco. “And there’s also Trump ‘the agenda’. The Trump agenda, the stock market loves. To the extent it continues, the market will like that.”
Republicans traditionally push pro-business policies such as tax cuts and deregulation, which boost stock prices. The market has, on the whole, given Trump a thumbs-up, with the market rising almost 20 percent during his presidency so far.
Polls show strong chances that the Democratic Party may win control of the House of Representatives in the Nov. 6 midterm elections after two years of wielding no practical political power in Washington, with Republicans likely to keep the Senate.
Trump warned in a tweet on Tuesday that a change in Congress would be bad for the market, saying: “If you want your Stocks to go down, I strongly suggest
