According to Strategas analysts, historical data shows that a Republican-controlled Congress yields the strongest earnings growth for the S&P 500.
The analysts noted that "a Republican congress on average has resulted in the strongest earnings growth for the index with an average of 15.5% earnings growth under a Republican sweep."
This insight comes from Strategas' Washington Policy team, which tracked data illustrating equity market performance under various partisan control configurations in Washington.
Recent inquiries from clients led to an analysis focusing on fundamentals, revealing the superior earnings growth associated with Republican congressional control.
The Strategas note also highlighted the potential for increased market volatility as the upcoming election approaches and even after it concludes.
"While it is not uncommon for election years to see a pickup in volatility as the election approaches, the elevated vol expected following the election is worth watching," they stated.
The analysts suggested that market concerns might be growing over the possibility of not knowing the election outcome on election night, a scenario that could significantly affect market stability.
Investors are advised to be cautious as the election season unfolds, keeping in mind the historical performance patterns associated with different partisan control configurations and the potential for heightened market volatility.