Here's The Study That Says When Republicans Sweep The House Next Month Stocks Will Surge

A change of U.S. government control — any change of control be it Republican or Democrat — has historically been followed by a U.S. equity rally over the next 12 months according to a study from Goldman Sachs.


The average gain in the S&P 500 during the 12 months following the six Congressional change of control elections since 1950 (including two Presidential election years) equals 11% with minimum and maximum returns of -4% and 33%, respectively (see Exhibit 6). Historically, the S&P 500 has generated positive 12-month returns following all 15 mid-term elections since 1949. Returns ranged from 3% to 33% with an average of 18%.


Thus Republicans might have two reasons to cheer, while Democrats can find solace in their upcoming potential capital gains. If the historical relationship repeats of course.

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