For the first time in more than a month, President Obama’s chances of reelection this November climbed from the previous week’s level, according to the Hedgeye Election Indicator (HEI). If the election were held today, the HEI calculates that the President would stand a 60.6% chance of winning reelection, up from last week’s reading of 59.3%. President Obama’s chances improved, according to the HEI, because of a strong performance in the US stock market last week.
Hedgeye developed the HEI to understand the relationship between key market and economic data and the US Presidential Election. After rigorous back testing, Hedgeye has determined that there are a short list of real time market-based indicators, that move ahead of President Obama’s position in conventional polls or other measures of sentiment.
Based on our analysis, market prices will adjust in real-time ahead of economic conditions, which will ultimately shape voters’ perception of the Obama Presidency, the Republican candidates and influence the probability of an Obama reelection. The model assumes that the Presidential election would be held today against any Republican candidate. Our model is indifferent toward who the Republican candidate is as the sentiment for Obama and for any Republican opponent is imputed in the market prices that determine the HEI. The HEI is based on a scale of 0 – 200, with 100 equating to a 50% probability that President Obama would win or lose if the election were held today.
