Executive Summary 

• The 2024 Presidential Election now looks like a toss-up, contingent on a handful of key battleground states.
• Long-term, the economic and market impact of this presidential election is likely to be muted by the lack of control that either party will have in the next government.
• Key economic policy differences include personal and corporate income taxes, tariffs/trade, immigration and regulatory policies.
• It would be reasonable, given perceived uncertainty, for market volatility to rise heading into the  election, but the longer-term impact on the economy and markets is likely to be more muted.

Shown in the left panel are implied election probabilities based on data from online betting sites BetOnline, Betfair, Bovada, Bwin, Polymarket, PredictIt, and Smarkets, aggregated by RealClearPolitics. References to any betting sites and the use of associated data in no way should be interpreted as an endorsement or recommendation of use by Glenmede. Shown in the right panel are averages of recent state polls as compiled by RealClearPolitics. Actual results may differ materially from implied probabilities or expectations. Probabilities and polling information shown are not the opinions of Glenmede and are shown for illustrative purposes only.

• The likely outcome of the 2024 election now looks like a toss-up, based on pricing from popular betting markets and thin polling margins for the candidates in key battleground states.
• It would be reasonable, given perceived uncertainty, for markets to follow the historical pattern of volatility rising heading into elections and declining after.

The outcome of the Presidential election typically matters less than the winning party’s strength of control

Data shown are average inflation-adjusted total returns for the S&P 500 for each two-year federal election cycle since 1872. Returns for the S&P 500 are backfilled with returns for the S&P composite based on data provided by Robert Shiller prior to 1970. Shown in the left panel are returns based on each party’s control of the White House, Senate and House of Representatives. Shown in the right panel are returns based on the composition of the White House, Senate and House of Representatives after each two-year election cycle. Divided refers to periods in which all three are controlled by different parties, Strong Sweep refers to periods in which one party controls all three and has a large enough majority in the Senate to end a filibuster via cloture and Weak Sweep refers to all other periods in which one party controls all three. The S&P 500 is a market capitalization weighted index of large cap stocks in the U.S. Past performance may not be indicative of future results. One cannot invest directly in an index.

• Markets have historically performed better with a Democrat White House and a Republican Congress, but the statistical relationship is rather weak.
• More significant is the market’s preference for a balance of power between the parties, which is likely connected to less regulatory change and a focus on compromise solutions.
• While there is some likelihood of a sweep outcome in either party’s direction, the likelihood of either party obtaining strong control of the legislature is quite small.

Policy plans under different election outcomes

The lists shown are a general representation of the policy platforms for the major candidates for president in 2024 and is not meant to be exhaustive. TCJA refers to the Tax Cuts and Jobs Act of 2017. Actual policies may differ materially from those listed.

• Some key economic policies still deserve monitoring as they will vary with the presidential outcome as well as the magnitude of control obtained by the associated party within Congress.​
• Potential outcomes include various modest headwinds to economic growth as well as some implications for specific economic sectors.