After the Jan. 21 Republican primary in South Carolina, it could be game over for all but one Republican presidential candidate, but to find out which party could eventually win the election, keep an eye on how the equity markets do from August through October.
Those were some of the conclusions from presenters at a New York Society of Securities Analysts presentation on “Market Forecast: Turbulent Times” Thursday at NYSSA’s office in Manhattan.
According to Sam Stovall, chief equity strategist of S&P Capital IQ, many investors believe that the fourth year of a presidential cycle is the best, when in actuality the third year is better, due to legislative actions to stimulate the economy in preparation for a reelection campaign.
Based on the average election-year gains since 1946, the S&P 500 Index in the third year typically posts a 16.1 percent rise, compared with just a 5.7 percent jump in year four. On average, the top sectors in the S&P 500 from 1970 to 2011 were energy, up 15.6 percent, and consumer staples, up 10.2 percent. Consumer discretionary, where retail stocks fit in, only rose an average of 4.1 percent, ahead of information technology, up 0.9 percent and materials, up 0.7 percent.
Stovall also said that if the market heads higher in the August, September, October time frame, on average 86 percent of the time the incumbent party gets reelected. In contrast, when the markets are down, 83 percent of the time the incumbent party is replaced.
Daniel Clifton, partner at Strategas Research Partners, and who directs legislative and public policy efforts at the firm’s D.C. office, pointed to South Carolina as a possible key primary for the Republican party.
“No Republican nominee has ever won Iowa and New Hampshire, and it looks like [Mitt] Romney will do it. If he wins Iowa, New Hampshire and South Carolina, it’s essentially game over,” Clifton said, noting statistics in which South Carolina has picked the Republican nominee since 1976.
Romney eked out a win at the Iowa caucuses on Tuesday. The New Hampshire primary is set for this coming Tuesday, where he is leading the polls.
Philip J. Orlando, chief equity market strategist at Federated Investors Inc., said that concerns over a double-dip recession are now “off the table,” since Japan is on the mend, given the resumption of manufacturing there. He foresees U.S. economic activity to accelerate, with the GDP hitting the 3-percent-to-4-percent territory for the fourth quarter of 2011. Still, the economy this year will likely slow, even though it stays in positive territory, he said.
As for whether U.S. consumers can sustain the spending that occurred over the holiday season, he said that in general they’ve rebalanced their personal balance sheets, although wages have remained stagnant. He also noted his 80-20 rule, in which the “top 20 percent are driving 80 percent of the consumption.”
Orlando pointed to the performance of the stocks of Apple, Coach, Nordstrom, Ralph Lauren and Tiffany, noting that they’re doing well because that’s where the “high-end [consumers] like to visit.”
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews
“Stranger Things” is getting a new cast member for season 2. Meet @sadiesink_, the 15-year-old who will be joining the Netflix series for its new season. You may recognize her from “The Glass Castle” with Brie Larson and Woody Harrelson, but the Texas native’s next role goes in an entirely different direction. She describes her character, Max, as “a rough and tumble skater girl [who] becomes friends with the boys at school.” The second season debuts on October 27. (📷: @jgreenery) #wwdeye
Amid the Harvey Weinstein controversy, there’s another sector that’s being put under the spotlight for sexual abuse: the modeling industry. While rumors about abuse and sexual harassment of female and male models — and the photographers, agents and others who perpetrated it — have circulated within the fashion world for years, model @cameronrussell started posting stories from models on Instagram last week about abusive situations they’ve encountered — from sexual harassment and molestation to attempted rape. Over 75 have weighed in so far. Read more on WWD.com. Link in bio. #wwdnews
To celebrate its 16th anniversary, @dylanscandybar tapped designers and celebrities to create mosaics out of candy. The mosaics will be auctioned off to support the philanthropic cause of each participant’s choice. Pictured here is the mural created by @aliceandolivia's Stacey Bendet. For a first look at some of the other artwork being unveiled tonight, go to WWD.com. #wwdeye
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye