Anti-Dem Propaganda Watch #16 - "Would a midterm loss for Democrats boost stocks?"

[TomCADem]

It is the day after primary elections, which means that it is time for a fresh round of anti-Democratic prograganda and narratives by the corporate media, which will be cited as truth by the right wing, as well as the astroturf "left" like Rand Paul's staffer. Here are the current corporate media narratives designed to wrest control from Democrats in Congress, as well as handicap the Obama administration.

http://finance.yahoo.com/news/Would-a-midterm-loss-for-hftn-3929628349.html?x=0

While most secular market indicators -- hemlines, sports, the weather -- matter little to big investors, the correlation between midterm elections and rising stock prices is practically gospel. "The charts are eye popping," says Deutsche Bank chief U.S. equities strategist Binky Chadha, who points out that the S&P 500 has produced gains in 18 out of the last 19 midterm election cycles. "It really is an anomaly," he says.

The S&P has returned an average of 13% in the six months after midterm elections, Chadha says, and 17% over the next twelve months, which is vastly better than how it has performed in non-election cycles. The indicator works regardless of which party wins control of Congress, but it's especially strong where there is a Democratic president and Republican legislature. When that scenario is in place, stocks average 14.6% annual returns, according to Bill Stone, chief investment strategist at PNC Wealth Management. "It's the best of all iterations," he says.

With that in mind, many investors are gleefully awaiting this year's midterm elections. The latest Cook Political Report projects that Republicans will gain control of the House and come close to winning back the Senate, pushing Congress into a state of political gridlock (according to Chadha, 70% of midterm elections result in the president losing seats in both chambers).

And gridlock, market experts say, is why midterm elections are good for stocks. The less power a president has, the less likely he is to push an activist agenda, unshackling businesses from the burden of regulatory uncertainty. Or so the theory goes.

[nashville_brook]

1. this is a Chamber of Commerce meme that's been floated in board rooms for months.

i've sat in one meeting after another where people think there's going to be some giant money gush "come November." i've heard "come November" numerous times as code for a GOP takeover.

delusional. i remember the same talk after the 2000 election, and we see where that got us.

[mucifer]

2. I remember wgntv in Chicago about 10 years ago on their news some "financial expert"

stated the same thing right before an election in her little "financial report". It wasn't a commentary there were no other sides given to her announcement that republicans are better for the economy. I almost had an ulcer.