Citi Global Markets is out with new data measuring the impact of election years on different sectors. Yahoo Finance reporter Alexandra Canal joins Asking for a Trend to break down the top-performing sectors as voters head to polls, particularly when an incumbent is on the ballot.

For more expert insight and the latest market action, click here to watch this full episode of Asking for a Trend.

This article was written by Gabriel Roy

Video Transcript

City global markets out with a new chart measuring the impact of election years on different sectors.

Yahoo Finance's Alexander Canal joins me now with a closer look, Ali Hey Josh, yes.

So ahead of tonight's first debate between President Joe Biden and former president Donald Trump.

I thought it would be appropriate to take a look back at how some of the major sectors and indexes have performed during an election year.

And as you can see a bit of volatility across the board demonstrated over here by the V with modest gains in the S and P and the tech sectors.

However, once you have an election year with an incumbent president in the running, we see that volatility goes down and the average returns of those sectors along with the S and P 500 go up.

Now, city argues that this is driven by investors pricing in the potential for continuity in policy.

So bottom line there, the return of an incumbent president often reduces the possibility of a the surprise in any form in the information technology sector.

That's typically the best performer during those years and by a pretty substantial margin, I would say as well, the tech sector being right there.

But now I want to take a look at what we're seeing here to date in 2024.

We're just far and above that did the averages that we've seen in the past.

With the exception of course, being real estate all the way down there is the housing market remains in recovery mode with this high interest rate environment.

But I will say that those high rates it's not stopped at the rest of this market.

We see tech, we see communication services significantly ahead while the big is down so far.

This year, the S and P has climbed about 15% year to date.

Typically during an election year, we see gains of just over 11% there.

So clearly what we're seeing so far in the market shows that there is potentially more room to run here.

All right.

Thank you.

We appreciate it.