It is exactly 100 days until US midterm elections, so today we offer up a quick review of President Trump’s approval ratings. Gallup organization data back to the 1950s shows that presidential approval ratings are reasonable predictors of mid-cycle election results. While the party that controls the White House typically loses congressional seats in off-cycle elections, a popular president can limit the damage considerably.
From Gallup’s latest polling (ending July 29th):
- President Trump currently holds a 42% approval rating, above the 39% average for his term but slightly down from prior-week (45%, which tied his inauguration week high water mark).
- This is below both the average of all US presidents since polling started in 1938 (53%) and all elected presidents’ ratings in their 6th quarter in office (57%).
- At the same time, President’s Trumps numbers aren’t far off many prior office holders at this time in their presidency. In July of his second year in office, President Obama had a 46% approval rating. Bill Clinton’s sat at 43%, and Ronald Reagan’s was 42%.
From the 538 website, an average of numerous large scale national presidential approval polling:
- President Trump’s mean approval rating is currently 41.2%.
- This is well above his mid-December numbers, which represent the trough of his presidency thus far, at 36.4%.
- The two most reliable polls according to 538 – Ipsos and Quinnipiac – show recent data similar to the Gallup readings at 40 – 42%.
Key takeaway: we put the US midterm elections into the “It doesn’t matter until it matters” market narrative bucket. Both US stock market returns and sector correlations have been healthy since Election Day 2016, despite the longevity of the current cycle, in large part due to the market’s embrace of both tax cuts and Republican-led deregulation.
A shift to a Democrat-controlled House – something political pundits think very likely – turns the breeze out of Washington into a headwind. So far, US equity prices have taken a wait-and-see attitude on Election Day 2018. Now that we’re inside of 100 days, however, we expect that will change.