Clinton or Trump? Many polls say it’s too close to call. Less conventional election prediction systems are also sending mixed signals about which presidential candidate will prevail on Nov. 8, making life tough for certainty-loving stock investors.
Since U.K. pollsters got the Brexit vote wrong back in June, causing a short bout of market hysteria after the surprise decision to exit the European Union, USA TODAY checked out what less well-known prognostication systems are saying about the chances of Democrat and incumbent party candidate Hillary Clinton and Republican challenger Donald Trump.
For clues, we checked out predictions tied to the stock market, Americans’ pocketbooks and the World Series.
Market says Trump's a winner
Barring a big stock rally heading into Tuesday’s vote, the market is currently predicting a Trump win.
The methodology used to tab Trump the winner is simple: when the Standard & Poor's 500 stock index does not post a gain in the three months leading up to Election Day, the incumbent party candidate normally loses. The market is down about 4% since early August, which bodes negatively for Clinton.
The indicator, courtesy of Strategas Research Partners, basically says the candidate from the incumbent party benefits from the good vibes a rising stock market creates, but can be doomed by a lousy market. Since 1928 this indicator has correctly predicted the next president 19 of 22 times.
Says Dan Clifton, head of policy research at Strategas: "Stocks are now sending one of two messages. First, the probability of a Trump win is increasing. Stocks are down 4% since August 8th and that has not been a good sign for the incumbent party historically.”
Pocketbooks pick Clinton
A peek inside Americans’ pocketbooks, however, suggests Hillary Clinton will be the next president. The “Pocketbook Model,” created by the Anderson Economic Group, predicts the former secretary of state will win by 3 to 6 percentage points.
The data-driven “Pocketbook Model” ignores polls, debate performances, policy positions and candidates’ personalities. It looks at just five variables: unemployment, wage growth, inflation, whether the nation is at war, and third-party candidates.
“As divisive, surprising and objectionable as campaigns often are, in the end voters go with their pocketbook,” says Patrick Anderson, CEO of Anderson Economic Group. This model starts with the assumption that most Americans generally reward the incumbent party with their vote when the economy is good, and punish them when it’s not.
Anderson says AEG’s model has predicted the largest vote-getter in 22 of the past 25 elections, and every election since 1980.
At the moment, pocketbook issues are trending higher, which favors Clinton. The nation’s 5% unemployment rate is down from its peak of 10% in October 2009. Wages have risen five straight months and inflation remains tame.
And then there's baseball ...
The “World Series Presidential Predictor” gives the edge to Clinton. So Democrats can thank the Chicago Cubs.
In the 1972 inaugural issue of The Baseball Research Journal, a study of World Series results between 1952 and 1968 found the Democratic candidate for president won the election every time a National League team won the World Series; the Republican candidate was victorious if an American League team became world champs. The Cubs hail from the National League, which signals a Clinton win.
This baseball indicator, however, when stretched out to include presidential elections from 1908 thru 2012, is less illuminating, as its accuracy is just 55.6% (it's been right 15 of 27 times).