The USA has a Presidential election in 6 months. At this point in time, polls begin to reflect the likely outcome of actual voting. This month’s summary discusses the implications.

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U.S. Markets
The USA has a Presidential election in 6 months. At this point in time, polls begin to reflect the likely outcome of actual voting. This month’s summary discusses the implications.

(1) What do insurgency campaigns like those of Donald Trump and Bernie Sanders mean to the election process? Most of all, insurgencies imply this -- new voters are playing a big role on both sides of the aisle. Trump and Sanders depend on support from anti-establishment types and younger voters. These types tend to turn up less reliably than the party faithful backing Clinton and the more traditional Republicans. “It’s quite simple,” said Sanders as he made a final rallying plea to volunteers at campaign headquarters in Des Moines before hitting the road for a weekend of frantic rallies. “If the voter turnout is high, we’re going to win. If turnout is low, we are going to be struggling.” “No matter how much you dislike Donald Trump and his effect on the Republican presidential primary race and there are many,many good reasons to do so You have to spare a little grudging admiration for the sheer madcap genius of Trump’s ability to disrupt, unsettle, and exploit the primary system.” Air Force Fighter Pilot Dan McLaughlin
(2) I liked one cogent thesis on this weird election cycle. One perceptive observer wrote: “It has been my contention for the last few years. We are living in an Interregnum.” The 20th century Italian philosopher Antonio Gramsci defined the Interregnum concept well: “The old is dying and the new
cannot be born; in this interregnum many morbid symptoms arise.” Interregnums provide this sense of being trapped between a dying establishment and a new order that is not quite formed.
Jonathan Taplin, Director, USC Annenberg Innovation Lab
(3) Let’s bust one myth: namely, Republican presidents are better for stocks. It is not true. “In election cycles since World War II, the Dow Jones industrial have posted bigger average returns under Democratic presidents” Stock Trader’s Almanac.
(4) Prepare for a meager U.S. stock bounce after the 2016 election. In “Presidential Cycle,” Ned Davis Research noted the S&P 500 posts its weakest returns in the first year of the four-year election cycle. In addition, in election cycle logic, 2016 returns should be strong. So should have 2015. Valuation and E.P.S stagnation remain more important to investors. Since 1900, stocks have gained.
• +3.4% on average in the post-election year,
• +4.0% in the midterm year,
• +11.3% in the pre-election year, and
• +9.5% in an election year.