Heres why stock-market investors need to watch Republican voter sentiment

Stock-market returns in congressional mid-term election years tend to be the weakest of the four-year presidential cycle, but 2018 could prove even less impressive than in the past, according to Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets.

The potential headwind has to do with a tight correlation between the stock market and Republican voter sentiment versus polls pointing to Democratic gains in November.

The S&P 500 is up more than 30% since Nov. 9, 2016. And since the 2016 election, which left Republicans in control of the White House and both houses of Congress, moves by the S&P 500 were 89% correlated with the Bloomberg Consumer Comfort Index reading for Republicans.

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