Like no president before him, Donald Trump used the stock market as a scorecard, arguing that strong profits were a claim of his economic administration.
Trump leaves office with major U.S. landmarks near historic highs. But how did his performance stack up with his predecessors?
Not bad at all, according to major indices. Based on the annualized returns of the S&P 500 SPX,
the American benchmark, Trump (+ 13.7%), saw the third best performance of the 15 presidents they have held since 1929, according to Dow Jones Market Data. Trump, however, slightly dragged down his immediate predecessor, Barack Obama (+ 13.8%). Bill Clinton (+ 15.2%) gets the first place.
Dow Jones Market Data
The Dow Jones Industrial Average DJIA,
the most popularly known blue chip indicator recorded an annualized return of about 11.8% under Trump, compared to 12.1% for Obama and 15.9% for Clinton. Calvin Coolidge, with the advantage of the Roaring ’20s, surpassed them all with an annualized increase of 25.5%, based on data dating back to the late 1890s.
Trump may claim some rights to brag about the technologically powerful Nasdaq Composite, which debuted in the early 1970s. An annualized 24.2% increase is first on the list, with Jimmy Carter in second place with a gain of 19.6%.
Of course, there are reasons why previous presidents avoided linking their success too much to the stock market. On the one hand, the market is volatile. If you have credit for your climb, you’re probably only more to blame if you fall.
The stock market is also far from a perfect indicator of the economy or how families feel about their own circumstances.
So what should investors read in the historical record? After all, many analysts have noted that no Democratic president has seen total performance decline throughout his tenure.
Opinion: The economy and the stock market tend to work better under Democrats
Jim Reid, a strategist at Deutsche Bank, argued that it may not be a guide to Biden’s presidency.
The question is whether performance during Democratic administrations was based on the ability to run the economy or simply on bad luck when the time came for some Republicans.
“For example, the United States had a Republican administration when the pandemic hit last year, the period between the peak of the dot-com bubble and the GFC (Great Financial Crisis) lows (George W. Bush.), When the 1973 oil shock occurred (Nixon) and during the Depression (Hoover), ”Reid wrote.
Meanwhile, Biden is inheriting an economy that is still struggling to recover from the COVID-19 pandemic and a stock market that many investors consider to have a price of perfection if not in bubble territory. However, actions have rallied since Biden’s election victory in November, in part because of expectations, which will drive aggressive stimulus measures.
And the new presidential term began strongly, as the Dow, S&P 500 and Nasdaq finished at record highs and recorded the best performance of the opening day since Ronald Reagan was sworn into office to begin his second term in 1985.