Stovall said in that year, Britain and France joined with Israel in a military action against Egypt over the Suez Canal. It was also the year of the Hungarian Revolution.
“This time around if the Democrats retain the White House, I will come up with two responses. One is that history is a guide but never gospel, and two, the negative performance by the market could be a reflection of the worry of domination that a Democratic sweep would bring,” said Stovall.
The market had been concerned about the possibility that Democrats would take the House of Representatives, but on Monday, after new revelations about an FBI probe into emails of a Clinton staffer, those worries were pushed into the background.
Stovall said when the market has been higher in the same period, the incumbent party won 82 percent of the time since World War II. The exceptions have been 1968, when there was a third-party challenger, George Wallace, and in 1980, when the third-party candidate was John Anderson. Gary Johnson is the third-party Libertarian candidate this year.
Even though probabilities have slipped, Clinton remains favored to beat Trump in the prediction market. PredictIt.org had her odds at 71 percent.
Daniel Clifton, head of policy research at Strategas, said it still looks as if Clinton will win, but the latest investigation news may affect the down-ballot Congressional races. He too notes that the historic guide of market performance prior to the election is not pointing to a win by the…