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“It was a grand sight but hellish in the extreme; streets, houses, trees, and everything in one grand furnace.” – Thomas Foster

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As the southeast US attempts to pick up the pieces from Hurricane Helene at the end of September, and Florida braces for the second landfall of a major hurricane in two weeks, today also marks the 153rd anniversary of the Great Chicago Fire which devastated the city over nearly three days. Ironically, the current disaster in the southeast was due to too much rain, while a primary factor behind the Chicago Fire was not enough rain. As William Bross, one of the Chicago Tribune’s owners at the time, reflected after the fire, “Under the burning sun for so many weeks, the whole city became virtually a tinderbox.” The city had been dealing with a lack of rain for months, and in the 22 days leading up to the blaze, there was only one rain event with a total of just 0.11 inches. With these types of extremes, it’s hard to find stability.

It’s still early, but there’s some stability in equity markets this morning and treasury yields have helped as the 10-year yield is unchanged and the 2-year yield is slightly lower. Crude oil is also giving up some of yesterday’s gains with a decline of nearly 2% but remains above $75. Overnight in Asia, China finally reopened for trading after the National Holiday, and the Shanghai Composite picked up right where it left off with a gain of 4.6%.  However, Hong Kong was down 9.4% for its worst day since October 2008, and Japan’s Nikkei fell 1.0%.  In Europe this morning, the STOXX 600 was down over 1% but has regained ground throughout the session and is now down just 0.5%.

We now have just four weeks left until Election Day and the start of the mid-term election season. Below we show the performance of the S&P 500 in the four weeks leading up to Election Day for every year since 1945. We have also included blue bars to indicate presidential election years.  Overall, the S&P 500’s performance during these years has been weaker than all other years. In years when Americans vote for President, the S&P 500’s median performance in the four weeks leading up to Election Day has been a gain of 0.82% compared to a median rally of 1.89% for non-presidential election years.  While median performance in non-election versus election years varies, the consistency of positive returns is identical at 68%.

While you would expect the market to be more volatile leading up to a presidential election year versus all other years, the opposite has been the case. Of the 19 presidential election years shown, the S&P 500’s maximum gain was 5.6% while its maximum decline was just 1.5%.  In non-election years, however, the range has been much wider with a maximum gain of 15.6% in 1974 (and three other years when the S&P 500 rallied over 10%) and a maximum decline of 21.4% in 1987.

As we head into the final four weeks, the country looks more divided than ever regarding its preference (or who it dislikes least) for President. Based on tabulations from RealClear Politics (RCP), Harris currently holds a 2.1 percentage point lead at the national level, but in the battleground states, Trump has a modest lead. Meanwhile, in betting markets, Trump has a 3.3 percentage point lead.

Based on the Electoral Map, RCP has Trump in the lead at 219 to 215 with 104 votes still in toss-up states, while if you include the toss-up states, Trump has a 24 electoral vote lead at 281 to 257.  Lastly, within the 12 battleground states, Harris holds the lead in six, Trump in five, while Pennsylvania, which is tied with Illinois for the fourth most electoral votes of any state (19) is tied. Whether your horse is Harris or Trump, there’s something in this table for everyone!