Stocks: The Big Winner in November's Elections
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What is the main topic discussed in this episode?
With your Money Briefing, I'm J.R. Whalen at The Wall Street Journal in New York.
Why do hosts say 'Stocks will be big winners' after the midterms?
It's unclear who'll be the winning candidates in November's midterm election, but one thing is clear. Stocks will come out as big winners. We'll tell you why in a moment. First, these money and market stories you should know. These are happy days for many stockholders.
What recent dividend and buyback data show strength in the market?
According to a report from S&P Dow Jones Indices, dividend payouts hit a record in the third quarter of 2018, the latest in a series of such records that's been matched by a series of stock buyback programs. Net dividend increases rose by $19.2 billion in the quarter. That's up from both the $15 billion increase in the year-ago period and the $13 billion net increase posted in the second quarter of this year. The report also says that companies in the S&P 500 spent a record $190.6 billion on stock buybacks in the second quarter of 2018. That represented growth of 58.7% from the second quarter of 2017. And for the first half of the year, buybacks were up 49.9%.
What luxury real estate story was highlighted and why does it matter to markets?
to about $380 billion. And the Wall Street Journal Real Estate Bureau reports that Washington Redskins owner Dan Snyder is selling his Potomac, Maryland mansion for $49 million. The approximately 30,000 square foot main house, inspired by an 18th century French chateau, was completed in 2004 and has five total bedrooms. It has zinc gutters and two solariums. One serves as a breakfast room, the others used as a gym. Plus it features a large double height drawing room, a formal dining room, a wine cellar, a library, and a restaurant-grade kitchen for entertaining. And if the buyer has friends over, the property has a two-bedroom guest house, a 12-car garage, a house manager's residence, and a vanishing-edge waterfront swimming pool.
There are many on Wall Street that are playing the game of what goes up must come down. The S&P 500 is up about 9.5% this year, but investors feel that stock markets that have been flying high these past few months are likely to come in for a landing thanks to November's midterm elections. But Wall Street Journal markets reporter Alison Prang is here with us with some data that could prove them wrong.
Why do some investors expect a post-midterm market pullback?
So, Alison, there's quite a bit of history here. The S&P 500 hasn't declined in the year after the midterm elections since the 1946 election.
Yeah, that could mean pretty exciting things for stocks, especially, as you noted, as we get worried about whether the bull market's going to end or when that could come to a stop. Strategic Securities was a firm we noted in our article, and it had a good report on this.
What historical data and expert analysis suggest stocks may rise after midterms?
They said that looking between the years 1950 and 2014, that the S&P 500 rose on average 15.3% in the 12 months after the midterms. So, I mean, that could mean really good things. Something interesting to note is that those gains really did vary, you know, and In some periods, they were low. After some midterms, they were a lot higher. But the increase overall was still the trend. Obviously, that average was high.
And in terms of this year's elections, if Democrats take control of both houses of Congress, that could ease up on trade tensions. And the market was certainly like that.
Well, trade, yeah. Trade has been a huge topic for Wall Street this year, obviously, you know, something that keeps coming to the forefront, whatnot with the tariffs. So I would imagine that if you're an investor, you know, if you're seeing less headlines on that, there's just less to digest there for sure.
And you point out in your story that if Republicans were to retain control of Congress, it could mean good news for health care stocks.
Well, Democrats have come out against, you know, the idea of higher drug prices. That's not something they're a fan of. So for sure, I mean, that would you would think just from that standpoint only that if you're getting people more, you know, less opposed to that, that that could that could be a benefit.
How could election outcomes and economic momentum influence sector winners like tech and health care?
You could actually put the politics aside for a moment. Consumer confidence as well as spending and even business investment is high heading into the holiday season.
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Chapters
7 chapters
1
What is the main topic discussed in this episode?
0:05–0:09
2
Why do hosts say 'Stocks will be big winners' after the midterms?
0:09–0:23
3
What recent dividend and buyback data show strength in the market?
0:23–1:11
4
What luxury real estate story was highlighted and why does it matter to markets?
1:11–2:27
5
Why do some investors expect a post-midterm market pullback?
2:27–2:50
6
What historical data and expert analysis suggest stocks may rise after midterms?
2:50–3:59
7
How could election outcomes and economic momentum influence sector winners like tech and health care?
3:59–5:29
Speakers
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