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US stock market expert predicts the result of the upcoming presidential election between Donald Trump and Joe Biden
Who will win the US presidential election on November 5, 2024? With Joe Biden and Donald Trump locked in a tight race, the stock market, which has been a reliable predictor in the past, might offer some clues.
Recent surveys of prediction markets show a wide range of probabilities for President Joe Biden’s chances of winning re-election, fluctuating from below 38% to as high as 76%. Currently, Trump has a 45% chance of winning, while Biden stands at 44%.
Poll Prediction Methodology
To get insights from different indicators, Mark Hulbert analyzed various economic, financial, and sentiment measures. These included the U.S. stock market, real GDP, the Conference Board’s consumer-confidence index, and the University of Michigan’s consumer-sentiment survey, focusing on their changes up to Election Day.
Among these indicators, only the stock market showed a strong correlation with the chances of the incumbent party winning, a correlation that is statistically significant at the 95% confidence level.
Analysis Findings Predict a Joe Biden Victory
Hulbert’s findings show a clear link between the stock market’s year-to-date performance and the likelihood of the incumbent party staying in power. Historical data since the Dow Jones Industrial Average started in 1896 supports this correlation.
Based on this historical correlation and the Dow’s current year-to-date gain of 5.6%, President Biden’s chances of winning re-election are 58.8%. These odds will change if the stock market goes up or down before Election Day.
Hulbert argues that even though electronic prediction markets are popular, they don’t have a better track record than the stock market. The sample sizes of these prediction markets are too small to establish strong patterns. For example, the Iowa Electronic Markets (IEM), one of the oldest, has only nine presidential elections in its history since 1988.
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