President Biden ends his historic first 100 days as President of the United States. With the Dow up 3,375 points, or 11%, it would be the second best 100-day performance in 100 years – easily beating the Dow’s median return by 2% and the average by 5%. Only the extremely high 75% performance of former President Franklin D. Roosevelt in the 1930s fared better.
“Love it or hate it, stocks voted and they love it … Since stocks also had their best rally since Election Day until the inauguration, the bulls must smile under the President Biden, ”said Ryan Detrick, chief market strategist. and senior vice president at LPL Financial.
But the president is not the stock market, they say. Former President Trump insisted on making the stock market his economic record – a departure from most of his predecessors. But it was Franklin D. Roosevelt who coined the phrase “first 100 days” and arguably spearheaded the many laws of this period that have reverberated throughout the American economy over the years. following.
When Roosevelt took office on March 4, 1933, the country was mired in the Great Depression that had lasted for years. Roosevelt immediately shut down the banks and the stock exchange. When stocks reopened for trading 12 days later, the Dow Jones climbed a record 15% on that first day. Roosevelt also called Congress to a special three-month session in which they passed a record 76 laws.
Since Ronald Reagan became president in 1981, the Dow Jones has achieved a positive annual performance 30 out of 40 times, or 75%. But the global and American economies have been in very different states for each of the seven presidents since then.
For example, in the graph above, former President Obama stands out as having presided over the only first 100 negative days in the past four decades – which is understandable given that he inherited the worst economy since the last four decades. Depression when he took office in 2009.
Notably, stocks hit a low in March that year, kicking off what some define as the longest bull market in history. But that March takeoff was fueled in large part by the massive increase in its quantitative easing commitment by the Federal Reserve. Fed Chairman Bernanke was a holdover from the George W. Bush administration at the time, and the Fed’s monetary policy is deliberately designed to be independent from the rest of the government.
All of this speaks to the difficulty of attributing stock performance to limited data sets or policy initiatives. “I don’t tend to give a politician a high percentage of weight when it comes to the stock market. There are so many forces impacting the stock market, and I think you are in election time. after an election – even 100 days after – there’s an attempt to connect those dots directly, ”Liz Ann Sonders, chief investment strategist at Charles Schwab, told Yahoo Finance Live this week.
Sonders uses Trump as an example. “[T]Think about the narratives that were at play when President Trump won in 2016 – that it was going to be fantastic for industries like finance and energy in terms of deregulation. Yet these are the worst performing sectors for four years. “
Biden was the opposite, said Sonders, who many expected to be headwinds for energy and finances. Instead, they are the two best performing sectors this year, with the Energy Select Sector SPDR Fund (XLE) up 26% and the Financials Select Sector SPDR Fund (XLF) up 20% in this year. period.
Sonders breaks down unintuitive sector movements. “[It’s] not because any of them shifted gears when it came to the policies they were proposing. Just that there are forces, I think, much more dominant in the long run and powerful that drive the markets. Politics can be part of it, but too often it is identified as if it is the primary driver. And you have 100 years of history to suggest that there are other factors that ultimately take precedence over the real drivers of the markets. “
Jared Blikre is a market presenter and reporter for Yahoo Finance Live. Follow it @SPYJared