Since his election, Joe Biden has been good news for investors.
Between election day on November 3 and today, the S&P 500 index climbed 14.3%. According to a report by CFRA Research, an investment research firm in New York, the profit is the best between election and inauguration day for any first-term president since World War II.
After an initial upswing after the election, the market cooled slightly. There were lower expectations due to concerns about the availability of Covid-19 vaccines and new coronavirus-related restrictions in several states. In early January, investors had already considered the distribution of the vaccines and the likelihood that the Biden government would raise corporate taxes, which would both affect spending and earn expectations for 2021. And President Donald Trump was still a major source of uncertainty.
“There was really concern about what he could do and whether or not he would leave,” said Hilary Kramer, chief investment officer at Kramer Capital Research in New York. On January 6, Democrats won both of Georgia’s seats in the Senate, Trump supporters attacked the US Capitol building and several Republicans spoke out against the Republican president, reducing investor concerns that Trump would continue to disrupt the transfer of power. . ‘Ironically, January 6 and the riots at the Capitol really changed things; and the market has risen, ”said Kramer.
The effect of Biden so far on the stock market could well benefit investors in the coming months. The data show, on average, that the S&P 500 rose 2.1% during the first 100 days of a Democratic president’s first term in office compared to the same period for a Republican government serving his first term, according to CFRA.
A downturn in the market is all but certain, and it could happen soon. During most years since World War II, the index has fallen to a point where it began that year. According to Sam Stovall, CFRA’s chief investment strategist, more than half of these losses occurred in the first quarter of the year.