How the stock market could perform under a unified GOP government
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A unified government under GOP control may signal better returns for investors than a divided Congress would have, according to an analysis by WT Wealth Management.
Why it matters: With the GOP narrowly retaining control of the House, Republicans now have a clearer pathway to pursue the business-friendly agenda that President-elect Trump promised during the campaign.
By the numbers: Over about a century, the S&P 500 and its predecessors had roughly double the returns during period of unified GOP control, compared to periods with a Republican president and Democrats leading at least one house of Congress, per the WT Wealth Management data.
- A unified GOP government averaged annual returns of 14.5%, while a divided government with a Republican president averaged returns of 7.3%.
Yes, but: Performance in the last unified GOP government, during Trump's first term in the White House, was more mixed.
- In 2017, the S&P 500 rose about 19%, but in 2018 it fell about 6%.
The bottom line: As any savvy investor will tell you, past performance is no guarantee of future results.
Go deeper: What markets are signaling about the Trump economy
