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Will US Midterms Give Stock Prices A Vote Of Confidence?

Daniel Chase




Midterms Matter

Few people recognize the importance of midterm elections in the U.S. and this notion presents a potential threat to the future of American democracy as we know it. Over the course of the last few weeks, we have witnessed events in the news with increasing severity, resulting in a nation guided by fear. Last week, a mass shooting took place at a synagogue in Pittsburgh, striking fear and pain in the hearts of the global Jewish community. One week prior, an individual sent packages containing improvised explosive devices to prominent political figures around the country. 

How we, as a country, respond to these threats is largely dependent on the people we elect to represent our interests in government, as well as the legislation we agree, should be brought to the table. It is for these reasons, among many others, that the midterm elections are crucial for the fate of our nation. While we are a nation built on the hopes and aspirations of its people, we are a nation funded by capital and driven by a growing, healthy economy. Historically, the midterm elections have resulted in upward trends for the stock market. 

In fact, according to comparative statistics, since 1946, there have been eighteen midterm elections and stocks have improved in the following months after every single election. Since World War II, whether a Democrat signed the White House Lease and the Grand Ol’ Party got hella congressional, the market has always positively responded to the events of the midterms. 

Election Results and Market Trends 

According to Forbes, stocks have climbed an average of 18./4% in the nine-month period from Sept. 30 through June 30 of the following year. Analysts point out that given we are 75% through the current presidential term, usually the strongest year for the market, the midterms on Tuesday will potentially bode well for investors. 

As for the method to this madness, political analysts offer a simple theory. Every President from Barack to Bush, and back, more than anything, wants to be reelected. Whether they want to further their legacy or make good on promises to “bring our troops” home, the leaders of our country want to stay in office as long as possible. One of the biggest indicators of success for a country is the strength and wellness of their economy and who else but the President can assure this takes place? Naturally, a stimulated economy causes the stock market to react positively, thus pleasing investors, who then laud the current President with impressive approval ratings. 

Boom, reelection. It’s a predictable, yet effective cycle. 

Of the nineteen presidents who’ve sought reelection since 1900, fourteen found success. If my junior high math skills are sufficient and intact, that’s a 73.6% chance that President Trump will be reelected if he chooses to go for the gold in 2020. Jeff Somer, a political contributor for the New York Times, argues that given the reelection history for presidents coupled with midterm-market correlations, the second half of a presidential term is the best time to sweeten the economy as reelection looms shortly after. After the disastrous October the market endured, both company executives and investors are hoping that the midterms repeat their 70-year pattern and bring the stock market back to life. 

“Markets will be closely watching the upcoming midterm elections as shifts in the balance of power in Washington could have meaningful implications for fiscal policy and foreign relations.”

Niladri Mukherjee, Director of Portfolio Strategy, Merrill Lynch

Tuesday’s midterm elections are expected to give Democrats control of the House of Representatives and keep Republicans safe in the Senate. Though this creates a diametric split in the legislative branch of government, economists believe the legislative gridlock “won’t necessarily weigh on the markets or real economic growth.” 

The bottom line is Americans need to get out and vote. If you’re interested in seeing fiscal policy passed by legislators, do everything in your civil power to elect representatives who will see to it that these laws come to pass. 

Given the historic correlation between the health of the US economy and the success of the stock market, it would be foolish not to voice your opinion, but, ultimately, that choice is up to the individual. 

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ROKU Stock On A Surge After Its Head-Turning Q2 Results

Jon Phillip



tech stock

Roku Inc (NASDAQ:ROKU) stock, the video-streaming pioneer is performing quite well in the Wall Street. The company is expected to go even as high as $150 as projected by analyst Laura Martin. More and more advertisers are using the platform instead of the traditional television for advertising their products and services.

An increased number of people are skipping video ads on television. Martin continues to keep ROKU stock as one of the top picks for mid-cap companies this year seeing the potential of a further stock price increase.

Blockbuster Earnings

The platform’s popularity which is measured by variables like audience count, usage and average revenue per user increased greatly resulting in a humungous growth. Last week, the stocks of the company rose by 25% post the impressive performance in yet another quarter.

The revenue reported a rise by 59% in Q2, 86% of which was due to a surge in the revenue generated through the platform. While a few years earlier, the revenue was dominated by the sales of the low-margin device, now over two-thirds of the total revenue is contributed by the Roku platform which is a high-margin business.

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Currently, the count of active accounts on the Roku platform stands at 30.5 million users, while the content streamed is for a total of 9.4 billion hours. Considering these figures and the number of days in the quarter, i.e. 91 days, the average consumption can be totaled to 3.4 hours per day per account. The consumers are not only using low-cost devices but are also buying the now available smart TV with the factory-installed operating system of Roku.

While, Needham analyst, Laura Martin had been a keen supporter or Roku’s stock even before its bullish phase, even the cautious ones are now of the buying opinion – take for example Stephens’ and Rosenblatt’s analysts have changed the stock from neutral to buy last week.

To make matters even better, the media giants are also amidst the process of launching new streaming services. This, coupled with the rapid growth of Roku is what made the $150 stock price appear realistic when the stock had started the year at just $30. The future of the company definitely appears brighter than ever.

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Stock Price Friday Morning Update – August 16, 2019

Joe Samuel



stock price newsletter

The Future Of Drug Delivery Has Biotech Investors Focusing On One Small Company

With a wave of groundbreaking products in the pipeline, biotechnology could be poised to keep churning higher for the foreseeable future. But how can you get in on the ground floor of the next big wave in biotech?

Click Here To Read More

Will This New Trend In Tech Bolster Big Opportunities For Investors?

It is undeniable how on-demand is changing the world around us as we know it. No matter which business segment you belong to, chances are that someone in your industry will be thinking about investing in the on-demand market. So how can people capitalize on this new trend?

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What’s Lying Ahead for (SOHU) After The Recent Developments

Sohu . com (SOHU) investors face a gloomy future after the stock of the Chinese company dropped to a new low in 16 years after it reported disappointing financial results last week. This is the first time since the spring of 2003 that the stock has sunk that low to trade in single digits.

What’s Next For The Chinese Tech Stock?

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What’s Lying Ahead for (SOHU) After The Recent Developments

A. Lawrence



SOHU stock price (SOHU Stock Chart) investors face a gloomy future after the stock of the Chinese company dropped to a new low in 16 years after it reported disappointing financial results last week. This is the first time since the spring of 2003 that the stock has sunk that low to trade in single digits.

Sohu reports $474.8 million in revenue in Q2

In the just-announced Q2 2019 financial results the company reported revenue of around $474.8 million in the quarter which is a 2% decline from what was reported a year ago but it is a 10% sequential improvement. This is the fourth consecutive quarter that Sohu has posted a decline in year-over-year top-line although the pace has moderated with each passing quarter.

Things were not good equally for the subsidiaries that it spun sometimes as they also experienced a drop in their stock. (CYOU Stock Chart) and Sogou (SOGO Stock Chart) which represent Sohu’s gaming and search operations respectively equally tumbled last week hitting new lows despite the segments reporting an increase in revenue.

Q2 revenue within company projections

The company’s quarter did not appear to be disappointing since the reported revenue of $474.8 million was within the company’s projection of revenue between $469 and $494 despite falling short of Wall Street estimates. The adjusted net loss of $50 million reported was better than the projections of a loss of between $60 million and $70 million in the quarter.

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The future for Sohu seems to be uncertain as it continues to perform unsatisfactorily. For instance, in the past year, the company saw its leading advertising revenue dip by 29% despite its Changyou-driven online gaming and Sogou-led search revenue increasing by 3% and 2% respectively.

For the third quarter, the company has estimated its revenue to be between $445 million and $470 million which is a sequential drop. The company has forecast a 10% to 14% jump in top-line which will help in offsetting the 12% to 21% drop in advertising revenue and 6% to 17% dip in online gaming revenue.

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