A new review of historical data contradicts the widespread belief that divided government benefits stocks. The S&P 500's total return was actually slightly higher when one party controlled the presidency and both chambers of Congress, not during periods of gridlock. The finding comes as split-party control of Washington looks increasingly likely ahead of the upcoming midterms.
The stock market does not perform better when control of Congress and the presidency splits between the two political parties, according to a review of historical data by MarketWatch columnist Mark Hulbert.
Many on Wall Street insist investors prefer gridlock in Washington, but that belief doesn't hold up historically, Hulbert notes. He argues the record needs correcting as split-party control of the government looks increasingly likely ahead of the upcoming midterms.
The data show the S&P 500's total return was slightly higher when one party controlled the presidency and both chambers of Congress than when power was divided.
Source: MarketWatch (snippet-based)
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