"There's a 64 percent probability that Kamala Harris will win this November's presidential election, given the stock market's strong year-to-date performance," writes financial egghead Mark Hulbert at Market Watch in an update on his model of "a significant correlation between the stock market's election-year performance and the incumbent party's chances of retaining the White House."
"It's important to put this model's conclusion in its proper context. On the one hand, it by no means is a guarantee. In 2016, for example, the stock market on Election Day was sitting on modest year-to-date gains and the incumbent party still lost. In any case, it's entirely possible the stock market will fall between now and Election Day and thereby reduce the probabilities currently calculated by my model. Harris's probability of winning would drop below 50 percent, for example, if the DJIA's year-to-date return on Election Day were to be negative," Hulbert continued in the piece.
That first caveat is a nice touch. A little humility from the brainiacs goes a long way, especially as a reminder that Trump 2016 was a sui generis orange swan event that on paper should have been an easy win for Hillary. The second one too, even if it's a (still necessary) "no shit." Good call to lowball it and not even mention the anticipated Fed rate cuts – which may or may not be already priced in.