We all know who won the election, but what corporation leveraged the seismic event with a surprisingly street-smart guerrilla marketing effort? Jackie Kolek reports from the wilds of Connecticut.
Following Barack Obama's historic win Tuesday night, counties across the nation were still counting the returns on Wednesday. Yet many of us will now be looking to another set of returns: ones delivered by the stock market. In a very savvy marketing move, a local Merrill Lynch representative was handing out a great research paper at the train station in Westport, CT on Wednesday. The paper, "Elections and Sectors," provides an interesting overview of historic performance of the market following presidential elections.
According to the report, equity markets tend to do much better in the 12 months following a Democrat being elected. Longer term performance favors Republicans. Regardless of what party gets elected, market performance is significantly better when the President and Congress share the same party. Since 1921, Republicans have held the office 47 years, compared to Democrats' 40 years. The 12-month average return for the S&P 500 under the Democrats in office is 20.9%, while Republicans saw an average return of 5.3% (adjusted to exclude FDR's first year. If you factor that in, the return is -6.4%). The impact of an election on various sectors is mixed. In the year following an inauguration, technology, industrials and utilities have been the top performing sectors when a Democrat takes offices. Staples, telecom and discretionary sectors are the winners under Republicans.
The report was very interesting and a smart move by Wei Chen, a local Merrill salesman. It also serves as a great example of leveraging breaking news and events to offer thought leadership. At Peppercom, we look to do this on behalf of our clients through the ACT Program (Available to Comment Today). We monitor breaking news and look for opportunities to offer our clients for expert commentary or a contrarian point of view on a specific issue. It's a very successful way to get clients in front of the right media and showcase their expertise.
Tuesday night Americans sent a loud message about the need for positive change. Let's hope the Markets agree.
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