October is the bad boy of the stock market. The Panic of 1907, the Crash of 1929, Black Monday in 1987.
It’s notable for another reason, too. The performance of Standard & Poor’s 500-stock index from July 31 to Oct. 31 has a curious way of predicting the winner of the presidential election.
As with every prediction, take it with a giant grain of salt. But the pattern is solid, as shown in this chart by Sam Stovall, equity strategist for S&P Global Market Intelligence1. When the stock market ends up for the three-month period, the Democrat wins. When it’s negative, the Republican wins. Since this July 31, the S&P is in slightly negative territory.