How Stocks Tend to Perform If Midterm Elections Lead to Divided Government

The U.S. midterm elections are not only an event that decides the fate of political power in Congress but also something that affects the stock markets.
In a note to clients, Jim Reid, a markets strategist at Deutsche Bank, pointed out that midterm elections are one of the “best historical buy signals for equities,” according to The New York Times.
Since 1950, the S&P 500 Index has moved up in the year following a midterm election, regardless of the party in power. The index historically has risen by 17.5 percent on a 52-week basis when Americans chose a Republican-controlled Congress and a Democratic president, the media outlet said, citing LPL Financial….}