Following last week’s primary votes, current US president Joe Biden and his predecessor Donald Trump both won enough nominations to ensure the battle lines for the November election are drawn.

This repeat of the 2020 contest represents the first rematch of two former presidents in 70 years, and polling suggests it will be a much tighter race this time round.

Many Americans don’t want a rematch as it provides them with two options with radically different approaches and potential outcomes.

The Biden camp is promoting the idea the US is ‘in the middle of a comeback’, as evidenced by strong employment and resilient consumer spending, and a Democrat win will mean more of the same.

Trump meanwhile has built his own comeback not on the economy but on pledges to seal the border and carry out ‘record-breaking’ deportations, which appeal to his deeply conservative Republican voter base.

Given this polarisation and the fact the news cycle is likely to be dominated by headlines which could cause short-term volatility, it is worth stepping back and asking does it actually matter who wins in November?

The answer is not really, because for most of the last 70 years the market has kept going up whoever is in the White House.

Analysis of data going back to the immediate post-war period shows there is generally no difference between a Republican and a Democrat White House in terms of long-term returns, whatever their differences in terms of policies.

‘While a lot can happen between now and election day on November 5, history suggests markets are primarily driven by the broader business cycle. In fact, markets have historically performed well under both parties,’ observe analysts at Principal Asset Management.

‘From 2008 through 2020 across both the Obama and Trump administrations, the S&P 500 generated a total return of 236% despite the vast perceived differences between the parties and the increasing polarisation of Washington politics.’

They point out this performance occurred ‘despite many budget battles, fiscal cliffs, debt ceiling crises, US credit rating downgrades, not to mention the global financial crisis, the pandemic, and more’.

They conclude by saying ‘making decisions solely based on who is in the Oval Office would historically have been a mistake’.

What Shares has gleaned from the data, however, is gains have generally been stronger under two-term presidents than for single-termers – for example Eisenhower (1953-1961), Johnson (1963-1969), Reagan (1981-1989), Clinton (1993-2001) and Obama (2009-2017) – so statistically speaking a Biden win should continue that trend. 

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