Judging Obama's First 100 Days

With President Obama’s first 100 days coming to an end last week, it’s a good time to measure how the market has responded to his initiatives.

Markets sold off in the weeks following inauguration, reaching a 12-year low for the Dow on March 9. Since then, markets have staged one of the biggest market rallies in history.

As you can see from the table, the 8.39 percent rise in the S&P 500 during Obama’s first 100 days ranks just behind President Kennedy, who saw a 8.92 percent rise during his.

If you add in dividends paid by S&P 500 companies during Obama’s first 100 days, the total return for the S&P jumps to 9.26 percent.

The average gain during the first 100 days since JFK took office is 3.89 percent for the Dow and 3.63 percent for the S&P 500.

The 6.93 percent drop for the S&P 500 during President George W. Bush’s first 100 days ranks as the worst performer among the group but the Dow managed a 1.39 percent gain during Bush’s first 100 days.

The 8.32 percent discrepancy between the S&P 500 and the Dow during George W. Bush’s first 100 days is by far the largest. On average, there was a 2.83 percent discrepancy between the two.

Jimmy Carter is the only President of the past 50 years to post a negative return for both the S&P 500 and the Dow during his first 100 days in office.

A recent Barron’s story said that of the 19 bear markets since 1917, 15 ended in the first or second year of a presidential term. Herbert Hoover was the only President during that time to see the bear market stretch into his fourth year; he wasn’t reelected.

Hirsch’s Presidential Election Cycle theory says that the year following a President’s election will be the weakest in terms of performance.

However, this hasn’t been the case for two recent Presidents. Both Bill Clinton and George H. W. Bush had strong first years, with the S&P rising 9 percent and 18 percent respectively.

The bounceback for the market has been promising but we’re not out of the woods yet.

We just learned America’s economy contracted more than 6 percent during the first quarter of 2009. That’s about three years worth of annual GDP growth in the U.S.

The bright side is we should start to see the effects of the stimulus plan showing up in the economy, which should help buoy the markets during President Obama’s next 100 days.

Comments

[russ:]

Republicans like to think that Democrats are bad for the economy and investing. That is not true and never has been. Politcal policy can and does influence the market but not as much as many think. Obama has brought some stability and confidence back into the market, thank goodness.

May 05 08:46 AM

[fireball:]

i am no fan of obama/bush/clinton/bush. i liked reagen until he gave in to the statists.
i believe this was a bounce that has sucked many back in. i have been using it to raise money and take it out of harm's way as much as possible. if i am wrong at least i didn't lose and still made a little.
i am not a R or D. i am a constitutionalist. i do not like what i am seeing. the state ha accelerated its' illegal/unconstitutional expansion.

May 05 09:11 AM

[speculari:]

Measuring markets vis-a-vis any presidents first 100 days is silliness at best. Phrenology might be a better indicator were we, for example, using each president's head & hat size to measure market performance - and, while we are here, why not include an indicator for global warming (whoops! sorry, I meant climate change).

May 05 09:16 AM

[brokerinbir...:]

Barak claims he inherited the economic condition from President Bush. So Barak takes no blame for the probelmatic issues, and claims victory for the successes. How insipid. How invidious.
Sophistry at it's best. So, Barak is only President of successful endeavours after the fact now? Anything that doens't work out was Bush's fault? Conservatives can find a lot of fault with Bush (both of them) and they do. But one thing you have to give them credit for is NOT blaming everything they can't handle on the predecessor President.
"Compromise is the negation of leadership." - Margaret Thatcher

May 05 11:07 AM

[henarl:]

100 days does not a Presidency make nor does one quarter a market make.

May 05 12:51 PM

[Steve in Gr...:]

I sold 100% of my U.S. equities in July 2008, because of my fear that Obama would be elected president and the market would collapse as a result.

I am no fan of Bush (another big-government statist, similar in most ways to Obama).

But, if you are trying to measure the impact of Obama on the economy, it is silly to start at 1/20/09. It was clear he was going to be elected in early 2008. Businesses and investors began to adjust their plans long before inauguration.

May 05 01:51 PM