As Wall Street traders took a breath of relief last week, with the Dow nudging upwards, some folks are looking to Congress—or rather, its absence—as the unlikely cheerleader for this fiscal pep. A study cited by MSN in a statement shared by UC News points to an interesting correlation: the stock market seems to hit its yoga poses more flexibly when lawmakers pack their bags and head out of session.
Michael Ferguson, who heads up the department of finance at the University of Cincinnati, apparently led a journey into the numbers that teases out a curious trend: the Dow Jones Industrial Average and the S&P 500 stretch out for gains more generously with Congress out of the picture. According to MSN's article via UC News, the Dow returned an annualized 13.8% during congressional recess, compared to a mere 2% during its sessions, spanning from 1897 to 2004. The S&P 500 told a similar tale, confirming the pattern was no fluke. Though Ferguson's study doesn't argue causation, the mirror in the numbers has certainly got Wall Street's eyes gazing.
Last week's market uptick coincides curiously with Congress's sudden decision to switch on their out-of-office replies until September. This stray from the norm pushed some investors to wonder if their portfolios found a bit more room to breathe. With the House unexpectedly adjourned, the markets, if but briefly, seemed to exhale in relief—and wallets across the country felt just a bit heavier for it.
