Less than a week before the US presidential election, polls are showing it’s a tight race between Vice President Kamala Harris and former President Donald Trump. Morgan Stanley wealth management head of US policy Monica Guerra joins Market Domination Hosts Julie Hyman and Josh Lipton to discuss historical election outcome indicators and what they are saying about the upcoming race.

The Bureau of Economic Analysis's first cut of third quarter US gross domestic product (GDP) showed the economy grew at an annualized pace of 2.8% during the period, below the 2.9% growth expected and the 3% growth recorded in the second quarter. Guerra explains that “Typically during election years, you'll see GDP and candidate favorability go hand in hand,” with strong economic growth signaling favorability to the incumbent. “While Harris isn't the incumbent, she is part of the incumbent party.”

Guerra there are signs that the market is pricing in a Trump win, notably, the Republican long basket is outperforming the Democratic long basket. Each basket have 12 differed exchange traded funds (ETFs) “representing different sectors and industries that might benefit from different policy changes and proposals,” she explains.

“The market, I would say, tends to be good at predicting [the election], but we are in this really interesting environment where voters are incredibly split,” Guerra says, adding that “If you look at 20 of the last 24 election cycles since 1928, every time that there's positive market performance in the three months prior to Election Day, that tends to favor the incumbent.”

For more on what economic and market indicators are signaling about the presidential race, watch the video above.

To watch more expert insights and analysis on the latest market action, check out more Market Domination here.

This post was written by Naomi Buchanan.