The cover article in Barron’s asks a seemingly simple question: “Trump and Sanders” Are they killing the stock market?” This is a topic that I have addressed lightly (both in depth and seriousness) in the past. For the sake of this piece we will ignore Barron’s mistake of correlating national polling numbers with the S&P 500, rather than probably of the victory, as they sort of acknowledge that problem at the end of the piece.
1) There is certainty a negative correlation between both Sanders & Trump v. S&P 500. Both candidates peaked in the beginning of 2016 as the stock market plunged. But, that is a little too loose of correlation. What we really need to do is dig down into sudden spikes.
2) Not much there when we look at the time between Iowa and New Hampshire, when Trump swooned. The market continued to loose money, even as the probability of Trump cratered after his second place finish in Iowa.