How Stocks Do Around The First Debate

The first presidential debate is tonight, September 29, with millions of people expected to tune in to see how each candidate handles the pressure. With tensions heightened amid an election that may be much closer than the polls currently suggest, any potential mistake could be magnified exponentially.

Wednesday we’ll summarize our takeaways from the event, but today we’ll take a closer look at how stocks historically have performed around a first presidential debate.

The first presidential debate was in 1960 between Richard Nixon and John F. Kennedy. There wasn’t a debate in 1964, and in 1968 and 1972 Nixon refused to participate. Since then there have been debates before every presidential election since 1976.

Interestingly, from 1980 to 1996 the first debate was on a Sunday evening, but the past five debates have been on all five days of the workweek. This year’s first debate is on a Tuesday, and the only other first debate on a Tuesday was in 2000—a year marked by disputed election results. Although by no way would we suggest this election will have disputed results because of the day of the first debate, it is a rather spurious correlation.

“Could stocks give a clue who will win the election based on how they do after the debate?” asked LPL Financial Chief Market Strategist Ryan Detrick. “Unfortunately, it doesn’t appear to give any hints, as returns and winners are all over the place. Still, 2020 is unlike any year we’ve ever seen before, so we could be one Howard Dean gaffe or Ronald Reagan zinger away from a major sway in this election.”

As shown in the LPL Chart of the Day, there isn’t much of a clue how stocks do after the first debate and which party might win.

View enlarged chart.

IMPORTANT DISCLOSURES

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities. All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

All index and market data from FactSet and MarketWatch.

This Research material was prepared by LPL Financial, LLC.

Securities and advisory services offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC).

Insurance products are offered through LPL or its licensed affiliates.  To the extent you are receiving investment advice from a separately registered independent investment advisor that is not an LPL affiliate, please note LPL makes no representation with respect to such entity.

  • Not Insured by FDIC/NCUA or Any Other Government Agency
  • Not Bank/Credit Union Guaranteed
  • Not Bank/Credit Union Deposits or Obligations
  • May Lose Value

For Public Use – Tracking 1-05060620