US elections and monthly stock market returns

Abstract

Market Returns, Election, Democratic, Republican, G10, G18,

Stock index manipulation around election announcements: evidence from Pakistan stock exchange

“…A time series analysis of fiscal expenditure of Malaysia is done from 1967 to 1997 to show how systematically ruling party create favors for its supporters in non-democratic regime. Jones and Banning (2009) observed no such significant difference in monthly stock returns. They also suggested that it is not appropriate to invest using a rule of thumb because investing decision is not as simple as just based on which political party the president belongs to.…”

Price-earnings changes during US presidential election cycles: voter uncertainty and other determinants

“…Santa-Clara and Valkanov (2003) find the excess stock market returns to have been higher under Democratic than Republican presidencies, with a value-weighted portfolio 9% higher and with an equal-weighted portfolio 16% higher. However, Jones and Banning (2009) investigate possible relations between stock market performance and various occurrences in US elections using monthly market returns over a period of 104 years. They find little evidence that market returns vary based on partisan control of the government.…”

“…Jones and Banning (2009) investigate various combinations of the White House, the US Congress, or both.…”

The financial costs of political uncertainty: Evidence from the 2016 US presidential elections

“…A significant number of past studies deal with the impacts of political uncertainty on financial market performances (see, inter alia, He, Lin, Wu, & Dufrene, ; Jones & Banning, ; Li & Born, ; Nippani & Medlin, ; Pantzalis et al, ; Sy & Al Zaman, , etc.). Most of these researches provide deep evidence revealing that political uncertainty significantly influences risk and return in financial markets.…”

“…In this case, positive price changes should be anticipated after the election, that is, until uncertainty about the policies to be achieved by the winner is resolved. A significant number of past studies deal with the impacts of political uncertainty on financial market performances (see, inter alia, He, Lin, Wu, & Dufrene, 2009;Jones & Banning, 2009;Li & Born, 2006;Nippani & Medlin, 2002;Pantzalis et al, 2000;Sy & Al Zaman, 2011, etc.). Most of these researches provide deep evidence revealing that political uncertainty significantly influences risk and return in financial markets.…”