Benjamin Cowen reviews historical market returns by U.S. political party control and argues the data shows stock market, dollar, Bitcoin, and gold performance varies by regime, with the strongest stock market averages under Democratic presidents with divided Congress and the weakest under Republican presidents with a Democratic Congress.
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This episode is a data-driven walkthrough of historical returns by political regime, using Cowen’s ITC political-verse pages. He starts with the S&P 500 and argues that the broad market generally trends higher regardless of party, especially since 2009, but that averages differ meaningfully by control of the presidency, House, and Senate. He highlights that the average annual S&P return is higher under Republican sweeps than Democratic sweeps in his dataset, while the strongest average returns come under Democratic presidents with either a split Congress or a Republican Congress. By contrast, a Republican president with a Democratic Congress is presented as the worst regime for equities, with multiple negative historical examples including 2008, 1974, and 1973. He then broadens the analysis to the U.S. …
Tactically, the near-term watchpoint is whether the post-midterm setup shifts from unified Republican control toward split government or a Democratic Congress, since that is the regime change Cowen says matters most for the market tape. In the very short run, the existing backdrop still looks compatible with the historical pattern he considers supportive for equities and gold.
Over the next few months, the base case is that the market will increasingly trade the actual balance of power rather than the party label alone. Confirmation would come if price action starts resembling prior split-government periods; invalidation would come if the post-election regime fails to behave like the historical buckets shown.
The structural message is that political control is a conditional regime factor, not a master driver of returns. The long-run regime implication is that divided government may act as a stabilizer for some assets, while unified control can amplify asset-specific responses, but broad trend still dominates over time.
The stock market generally goes up over time regardless of which party controls government.
He says the S&P 500 mostly trends higher and especially since 2009 the market has risen across many political configurations.
In his chosen sample, Republican sweeps produced higher average and median annual S&P returns than Democratic sweeps.
He explicitly compares the regime averages and says the Republican sweep historically has given better returns than the Democratic sweep.
The weakest equity regime is a Republican president with a Democratic Congress.
He calls this the worst outcome for the market and cites multiple negative historical years under that configuration.
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