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The stock market loves Biden more than Trump. So far, at least.

From the moment he was elected president in 2016, through a campaign that failed to be reelected, Donald J. Playing cards Called the stock market As a presidential report card.

According to Mr. Trump, the market loved him and hated Democrats, especially his opponent Joseph R. Biden Jr. At the presidential debate in October, Mr. Trump caveat Mr. Biden: “If he is elected, the market will collapse.” In various situations, he made Democrats catastrophic and their victory was ” depression, “This makes the stock market”Collapse.. “

So far, that’s not the case.

As long as the Dow Jones Industrial Average measures the love of the stock market for the president, its early report card states that the market loves President Biden much more than President Trump on his first day in office.

Mr Biden will get an A early this time. Mr. Trump received a B for market performance during his first few days as president, but received higher praise for most of his remaining term.

From election day to Thursday, the Dow rose about 26% from 14% four years ago during the same period.During ~ Sign The early return of Mr. Biden’s actual tenure was exceptional, as the United States is actively recovering from the pandemic. The rise in the stock market from the presidential inauguration closing to Thursday’s closing marked the best start for the presidency since another Democrat, Lyndon B. Johnson.

Vice President Johnson took office that afternoon after President John F. Kennedy was assassinated in Dallas for those who were too young to remember the terrible day of November 22, 1963. By measuring stock market performance from the end of the day when everyone took office, Johnson and Theodore Roosevelt, who became president on September 14, 1901, after President William McKinley died in a shooting injury. Can be included.

Republicans have long claimed that it is the party business, And its Republican rules are good for stocks. However, historical records show that since the beginning of the 20th century, markets have generally performed better under the Democratic president.

By Thursday (Day 109 of the Biden administration) by Paul Hickey, co-founder of the Bespoke Investment Group, the market under President Biden was the third of all presidents during his equivalent tenure since 1901. It is ranked.

These are top performers:

  • Franklin D. Roosevelt, launched March 4, 1933: 78.1 percent.

  • Johnson, launched on November 22, 1963: 13.8 percent.

  • Mr. Biden, inaugurated on January 20, 2021: 10.8 percent.

  • William H. Tuft, launched on March 4, 1909: 9.6 percent.

Note that three of the top four (Roosevelt, Johnson, Biden) were Democrats. It fits the apparent pattern. Since 1900, the median stock market profit has been 7.9% when the Democratic Party took office. For Republicans, it’s only 2.7 percent.

In contrast, the Dow rose 5.8 percent in the first few days of Mr. Trump’s inauguration. It was a strong reward for Republicans, but not enough for Democrats.

Now consider the long-term return. Consider how Dow has performed well over the course of all presidential offices since 1901. Again, the market was strong under the Democratic Party, up 6.7% annually compared to 3.5% under the Republican Party.

Using this metric, the Trump administration looks much better and is fourth of all presidents.

These are the annual revenues of top-ranked presidents.

  • 25.5 percent under Republican Calvin Coolidge in the Roaring Twenties.

  • 15.9 percent under Democrat Bill Clinton.

  • 12.1% under Democrat Barack Obama.

  • 12.0 percent under President Trump.

This is a very good market performance under Mr. Trump, recalling that the world was freed from the coronavirus last year, including the collapse of the stock market in late February and March.

With the surge in the Federal Reserve on March 23, 2020, the market recovered rapidly in response to the emergency assistance program enacted by Congress. However, in 2020, the market, economy and pandemic did not improve enough to win President Trump in his next term.

As for President Biden, he is undoubtedly benefiting from the rising economic and market trajectory that began under his predecessor, just as President Trump benefited from the economic growth left by President Obama. ..

It doesn’t always work that way. During the Great Depression, the market soared during the first 100 days of Franklin Roosevelt. He offered a hopeful contrast with his predecessor, Herbert Hoover, and a complete break. Herbert Hoover presided over the worst stock market crash in modern history at the time. During Hoover’s four-year tenure, the Dow lost an annual rate of 35.6%, which was far worse than any president.

The recent boom in the market is easy to explain. Back in July, I Quote Investment analysis suggests that the stock market could work very well with President Biden, despite Mr. Trump’s objections. These factors included more aggressive and efficient management of the coronavirus crisis, which promotes economic recovery and corporate profits. A generous fiscal stimulus with the potential to build huge infrastructure. Return to international involvement with reduced trade tensions. And a renewal of America’s global climate change efforts.

So far, that analysis has been holding up. But will it lead to strong profits through the Biden administration?

I have no idea. Unfortunately, none of this tells us where the stock market is heading. All we know is that it rose more than it fell in the long run, but moved fairly randomly every day, sometimes turning into a long fall.another Decline It can happen at any time, no matter what the president does.

The only approach to investment that I want to actively adopt is passive. Use low-cost equity and fixed income index funds to build a well-diversified portfolio and continue for the long term. And I will ignore the recommendations of politicians, especially those who will link their own election wealth to stock market performance.

The stock market loves Biden more than Trump. So far, at least.

Source link The stock market loves Biden more than Trump. So far, at least.

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