Ask Matt: Do stocks react to political conventions?

Q: Do stocks react to political conventions?

A: Stocks hate uncertainty. Political conventions are great examples of events that stoke questions and concerns.

These political bashes are often a time where political hopefuls promise change and reform, which are often things investors don’t want to hear about. Investors like stability and consistency.

Investors historically have been unnerved most by the Democrats’ convention. During the 17 Democratic conventions since 1948, the Standard & Poor’s 500 recorded a median price decline of 0.2%, according to research from Sam Stovall of S&P Global Market Intelligence. Even a week after these Democratic conventions, the market was 0.24% lower.

The Republican convention has tended to be more positively received by investors. Stocks rose 67% of the time following the 18 Republican conventions since 1948 by a median of 0.22%. A week after the conventions, those gains subsided to 0.12%.

If there’s one thing that investors seem to agree upon, though, it’s a sense of relief when the convention season is over. Stocks posted a median gain of 0.9% in the week following the end of the Democratic convention, when that meeting came after the Republican convention.

Paste BN markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at mkrantz@usatoday.com or on Twitter @mattkrantz.