Dow Jones Election Indicator

I like this Election Indicator from the NYT which suggests that a healthy performing Dow Jones Industrial Average (DJIA) usually means victory for the incumbent party in the US election. Their chart ranks 28 presidential terms since 1900 – part of the chart is below – complete chart can be found at “US Presidential Stock Markets”.

When the DJIA has risen more than 5% a year the incumbent party has won the election on 11 occasions to losing on 3. When the market fell below a 5% growth rate the incumbent party has lost 8 out of 13 elections.

Obama has been doing well with a compound annual gain of 8.8%.

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