This chart compares the S&P 500’s performance during election years with the actual S&P 500 performance in 2024 (through September 13). It provides a visual comparison of how the current year aligns with historical election year trends, represented by multiple lines for different time periods.

Key Observations:

1. Election Year Cycles:
   • Blue Line (Election Year Cycle, Last 5): This line represents the average S&P 500 performance during election years over the last 5 cycles. The general trend shows a positive performance from January through December, with a notable upward trend starting mid-year and accelerating towards the end of the year.
   • Black Line (Election Year Cycle, Last 10): This line, reflecting the last 10 election years, shows a more volatile performance compared to the 5-year cycle. There are sharper declines early in the year and greater fluctuations throughout, but overall it trends positively, especially towards the latter part of the year.
2. Current S&P 500 (2024):
   • Red Line (Actual S&P 500 through 09/13/2024): The actual performance of the S&P 500 in 2024 follows a similar pattern to previous election years until August. The mid-year dip in August is notable, though it begins to rebound heading into September.
   • Comparing the current performance to the average election year cycle shows that while the 2024 S&P 500 was following a positive trend, the dip in August deviates from the smoother upward trend seen in historical election years.
3. Historical Trends (Gray & Black):
   • The gray line (5-year average) and black line (10-year average) both indicate that during election years, the S&P 500 typically has periods of volatility and short-term corrections. However, they show strong recoveries towards the end of the year, particularly in October through December, suggesting that positive sentiment or market stability usually returns as the election approaches.

Analysis:

• Similarities in Trend: The 2024 S&P 500 (red line) has followed a similar general trend to election years, with periods of strength followed by a mid-year correction. This is typical during election years, where uncertainty surrounding political outcomes can cause market volatility.
• Current Deviation: The 2024 August decline is sharper than the average election year trend, but this deviation may correct if the pattern of a year-end rally seen in previous election years holds true.
• Outlook for 2024: If the historical trend repeats, we can expect the S&P 500 to recover and potentially rally into the end of 2024, in line with typical election year patterns. Historically, the market tends to stabilize or improve as election uncertainties get resolved and policy outlooks become clearer.

Conclusion:

The S&P 500 in 2024 has so far followed a similar path to historical election years, with a notable correction in mid-year. However, election years often see end-of-year recoveries, and if history repeats, the market could see positive momentum heading into the final months of 2024. This chart underscores that the trend is more important than the level, suggesting that while short-term volatility is common, the overall trajectory remains aligned with previous election cycles.

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