Like no president before him, Donald Trump used the stock market as a scorecard, arguing that sharp gains were a justification for his economic stewardship.
Trump is leaving office with U.S. key metrics near overall highs. But how did his performance match that of his predecessors?
Not too bad, according to the major indices. Based on annual returns for the S&P 500 SPX,
according to the US benchmark Trump (+ 13.7%), the 15 presidents who have served since 1929 achieved the third best performance, according to Dow Jones Market Data. However, Trump slightly left behind his immediate predecessor, Barack Obama (+ 13.8%). Bill Clinton (+ 15.2%) claims first place.
Dow Jones Market Data
The Dow Jones Industrial Average DJIA,
the more well-known blue disc meter, has an annual return of nearly 11.8% under Trump, compared to 12.1% for Obama and 15.9% for Clinton. Calvin Coolidge, with the benefit of the roaring 20s, all topped with an annual increase of 25.5%, based on data dating back to the late 1890s.
Trump could claim some bragging rights when it comes to the tech-heavy Nasdaq Composite, which made its debut in the early 1970s. An annual increase of 24.2% is at the top of the list, with Jimmy Carter taking second place with a profit of 19.6%.
Of course, there are reasons why previous presidents have shied away from attaching their success too closely to the stock market. For one, the market is volatile. If you get recognition for its rise, you will probably only get more debt if it falls.
The stock market is also not a perfect measure of the economy or how individual households feel about their own circumstances.
What, then, should investors read in the historical report? After all, many analysts have noted that no Democratic president has seen a decline in total returns over the course of his term.
Opinion: The economy – and the stock market – tends to do better among Democrats
Jim Reid, a strategist at Deutsche Bank, argued that it might not offer much of a guide when it comes to the Biden presidency.
The question comes down to the question of whether the performance during the Democratic government was due to skill in dealing with the economy, or simply bad luck when it comes to timing for some Republicans.
‘The US, for example, had a Republican government when the pandemic took place last year, the period between the peak of the dot-com bubble and the GFC (Great Financial Crisis)’s lows (George W. Bush.), When the oil shock in 1973 was lower. (Nixon), and during the Depression (Hoover), ”Reid wrote.
Biden, meanwhile, is inheriting an economy that is still struggling to recover from the COVID-19 pandemic and a stock market that many investors consider perfection if it is not in bubble territory. However, the stock has risen since Biden’s election victory in November, in part due to expectations that he will pursue aggressive incentives.
And the new presidential term began with a bang, as the Dow, S&P 500 and Nasdaq all finished at record highs and recorded the best Inauguration Day performance since Ronald Reagan took the oath of office to begin his second term in 1985.