the energy complex has its own issues, with the price of oil remaining at low levels.)
Of course, there are many factors in play beyond the election, from the possibility of the Federal Reserve raising interest rates to the potential “Brexit” — Britain seceding from the European Union — to a slowdown in China and emerging markets.
But the circus that is the United States presidential election may be playing an even bigger role, consciously or subconsciously, than most executives may want to admit.
If history is any guide, from now till Nov. 8, the stock market is likely to trend down, putting a psychological damper on deal-making and initial public offerings. According to research by Stephen Suttmeier, a technical analyst at Bank of America Merrill Lynch Global Research, the Standard & Poor’s 500-stock index has fallen an average of 2.8 percent since 1928 during election years like this one, in which the incumbent — in this case, President Obama — is not seeking re-election. The final year of an incumbent’s eight-year term is the only year that averaged negative returns, Mr. Suttmeier’s research said.
This phenomenon pushes down far more than just the stock market; the real economy is affected too. Despite all sorts of the idiosyncratic factors that have seemingly influenced the global economy over the years, there is a clear trend. “Electoral uncertainty induces a decline in G.D.P. portions composed of costly-to- undo investments,” according to a widely discussed 2014 study by Brandice Canes- Wrone and Christian Ponce de Leon of Princeton University titled “Elections, Uncertainty, and Economic Outcomes.”
It is a favorite epithet of C.E.O.s: “uncertainty.” The word is routinely used as a catchall for why things aren’t going as well as they should. Sometimes the uncertainty is economic, but these days it is mostly political.
“Election outcomes are relevant to corporate decisions, as they have implications for industry regulation, monetary and trade policy, taxation, and, in more extreme cases, the possible expropriation or nationalization of private firms,” Brandon Julio, a professor at the London Business School, wrote in the Journal of