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CNBC: History Says Democrats Taking House Would Be Bad for Stock Market

NEW YORK, NY - OCTOBER 04: Traders work on the floor of the New York Stock Exchange (NYSE) on October 4, 2018 in New York City. With bond prices dropping interest rates have been surging resulting in the Dow Jones Industrials Average falling over 200 points at the close. (Photo …
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If Democrats succeed in capturing the House of Representatives Tuesday, investors may see their savings suffer next year.

CNBC reports that an analysis of historical returns shows that stock performance suffers when the House passes from one party to the other.

From CNBC:

Data compiled by Fundstrat Global Advisors showed the median stock-market return since 1896 was only 1.9 percent a year after the House majority flipped from one party to the other. Meanwhile, the median return totaled 16.8 percent when the House majority stayed the same after the midterms.

Fundstrat used Dow Jones Industrial Average data to calculate returns before 1945 and S&P 500 data for returns post 1945.

Wall Street widely expects that the House will go to the Democrats this year, with Republicans keeping control of the Senate. Unexpected results could create a lot of volatility. If Democrats succeed in taking the Senate, most Wall Street analysts foresee a big downturn for stocks. If Republicans maintain control of both the House and the Senate, stocks could explode higher.

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