Vice President Kamala Harris will win the 2024 US presidential elections if a longstanding indicator based on market performance is to be believed. The stock-market-based method, known as the “Presidential Predictor,” has a successful history of predicting who will become the country’s next president.
It has been on point while forecasting the outcome of 21 of the past 24 elections. Harris is the clear winner, as per the predictor that has based its result on current stock market trends.
Notably, it accurately forecast a win for Joe Biden in the 2020 elections.
What Is the ‘Presidential Predictor’?
The Presidential Predictor forecasts the winner based on the happenings in the stock market. Its main principle is linked to the S&P 500 index. When the index sees a rise in the final three months before the election, it is an indication that the incumbent party will remain in office.
When the index drops, the opposition will claim victory.
The predictor has been put to use since the 1928 elections. Out of the 15 elections, 12 have gone in favour of the ruling party that has benefited from a strong stock market performance in the three months before the election, clinching victory.
Similarly, a drop in the market during the same time period has handed a loss to the incumbent party in eight out of nine cases. According to LPL Financial’s chief technical strategist Adam Turnquist, this means that the “Presidential Predictor” has an 83 per cent accuracy in predicting election outcomes.
What is the current market trend?
The S&P 500 has been going strong in recent months and the index has been on the rise since August. Other indicators like the Dow Jones Industrial Average also reached record highs recently.
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Historically speaking, this puts Harris ahead in the race against Trump.
However, some experts are sceptical about the predictor’s accuracy and say that a change in the economic and political landscapes means it might be as correct today.
“There is no simple, or complicated, economic model that predicts perfectly whether the incumbent’s party will win a presidential election,” Jay Ritter, professor of finance at the University of Florida’s Warrington College of Business, told Newsweek.
“Even if a model has worked in the past, that does not guarantee that it will work in the future,” he added.
