Market risk: Weakest part of Presidential Cycle starts in mid 2013 (Jul/Aug peak)

click for ginormous chart
Weakest part of Presidential Cycle
Source: Merrill Lynch

 

From Merrill:

2013 is the first year of a new Presidential Cycle. The first quarter of the first year of the cycle is down 1.33% on average (1Q in 2013 bucked this trend), but the weakest period of the Presidential Cycle is from a July/August Year 1 peak to a September Year 2 (mid-term election year) low. The average decline over this period is 4.31%. With the rally in September, 2013 is bucking this weaker Presidential Cycle period so far.

 
 
Source:
Market Analysis: Monthly chart portfolio of global markets
Stephen Suttmeier
BofA Merrill Lynch Global Research 01 October 2013

Category: Cycles, Investing, Markets

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5 Responses to “Weakest Part of Presidential Cycle”

  1. rd says:

    I think this is oneeason why Obama will hold firm over the next three weeks. If the GOP House “hegotiation process” will result in economic problems, now is the time for it to occur without disrupting the next Democrat’s run for the WH. He also doesn’t want to get rolled and be a lame duck for the next three years.

    The debt ceiling “debate” is probably going to get very ugly.It will be interesting to see if any adults show up in the House or if it is just going to be a big day-care center over the next few weeks like it is now. I think many of the House members know very little about the banking system and have no comprehension about what defaulted T-bills and bonds could accomplish.

  2. rd says:

    The other reason the debt ceiling fight is going to get ugly:

    http://blogs.marketwatch.com/capitolreport/2013/10/03/what-do-republicans-want-in-shutdown-fight-one-rep-isnt-sure/

    Hard to make a deal when the other side doesn’t know what they want other than the one thing you are certainly not going to give them.

    • ilsm says:

      Sadly, the republicans are like the “highway man” Lincoln described in the Cooper Union speech in 1860.

      They are robbing the US constitution as well as those people needing support as a result of the failed system they would destroy to keep. If they cannot rob the constitution they are willing to kill it and say dems made them murderers.

      Dysfunctional republic!

  3. [...] We are in the weakest part of the Presidential election market cycle.  (Big Picture) [...]

  4. wally says:

    Do first and second terms differ sigtnificantly?