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Categories: Economics / Markets
Topics: Barack obama | Stock markets | Dow jones
Three years into Barack Obama's term as US president, how do equity market returns under this administration compare with those seen under previous leaders?
At first glance, a president decried as anti-business and a US economy hamstrung by high unemployment and the pressing need for fiscal reform don't exactly look like a perfect combination for stocks.
But Barack Obama's first three years of office have marked one of the most sustained periods of market outperformance in US history, according to research from Bespoke Investment Group.
Whether that is more by luck than judgement is another question: Obama's first day of office - 21 January 2009 - came just 44 days before the Dow Jones Industrial Average bottomed at 6,469.95 on 6 March.
As of 20 January 2012, the index had almost doubled from those lows, with the gain seen over Obama's entire three year tenure standing at 60%. That puts Obama just ahead of the 59.9% gain seen in Clinton's first three years but just behind the 61.2% gain at the start of the Eisenhower era in 1953.
What then of 2012? Improving economic data has led many to forecast a year of strong gains for US stocks - though there were many similar predictions made at the start of 2011, a year which produced a flat return for US indices.
Inevitably, this year has also brought with it the usual talk of the supposed link between strong returns and the final year of a Democratic presidential cycle.
But even the most bullish forecaster is unlikely to suggest Obama's full term will produce better returns than those seen under Clinton, his Democratic predecessor: for that to happen, the Dow would need to advance around 35% this year.
Dow Jones Industrial Average total returns over first three years of Presidents' terms in office:
| President | Start of term | Return/loss (%) | |
|
T Roosevelt |
15/9/01 | -16.3 | |
| Taft | 5/3/09 | 0 | |
| Wilson | 5/3/13 | 13.6 | |
| Harding* | 5/3/21 | 17.4 | |
| Coolidge | 3/8/23 | 81.9 | |
| Hoover | 5/3/29 | -72.6 | |
| F Roosevelt | 5/3/33 | 190.1 | |
| Truman | 13/4/45 | 13.3 | |
| Eisenhower | 21/1/53 | 61.2 | |
| Kennedy* | 21/1/61 | 12.2 | |
| Johnson | 23/11/63 | 12.2 | |
| Nixon | 21/1/69 | -3.2 | |
| Ford* | 10/8/74 | 23.4 | |
| Carter | 21/1/77 | -9.6 | |
| Reagan | 21/1/81 | 32.4 | |
| G Bush | 21/1/89 | 45.6 | |
| Clinton | 21/1/93 | 59.9 | |
| G W Bush | 21/1/01 | -0.6 | |
| Obama | 21/1/09 | 60.0 |
*In office less than three years
Source: Bespoke Investment Group
Categories: Economics / Markets
Topics: Barack obama | Stock markets | Dow jones
Comments
Po faced
Harry, I lhave enjoyed your oft abrasive comments over the years with a smile of agreement or a smile of disbelief but - if I can po faced for a moment (a pose that I generally treat with mistrust and disdain)- to say of Nixon "So he told a lie or two – how unusual for a politician!!" one has to say Nixon told more than a lie or two. I would suggest you would be the first to say two (or in Nixon's case even more wrongs) do not make a right. My regard for politicians is healthily crumbling by the year but even I think that to compare them all with Nixon is a bit beyond the pale. Still I'm outta here so what do I care! I care only in that I will miss your missives.
Posted by: I'm Outta Here
27 Jan 2012 | 17:34
Mr Katz
You could just as easily claim it was Reagan who sowed the seeds of the current catastrophe - a combination of tax cuts and huge defence spending (failure to see the Soviets were collapsing of their own accord) meant the national debt tripled under his administration.
I'm no real fan of Clinton, but he did at least stick to both sides of the tax and spend doctrine, which meant he(unlike Brown) produced budget surpluses.
Posted by: Victor
29 Jan 2012 | 12:44
@ Outta Here
Well I have to say I can’t get that indignant about it. IF you want me to get indignant about a politician let’s talk Brown or Wilson.
As far as Tricky Dickie is concerned I look at it quite simply – what did he achieve? I think on that basis he did pretty well. I am less pleased with small lies and ineptitude than with big ones and a measure of success.
Unlike you my regard for politicians isn’t healthily crumbling – it is so low there is nothing left to crumble.
If I take it correctly – you are about to retire – in which case very best wishes for a very long and extremely happy retirement.
Victor
You could indeed, but defence spending is very Keynesian and it does lead to innovation. But I don’t think there is much doubt that Clinton did sow the seeds of the mortgage and housing catastrophe in the States.
Posted by: Harry Katz
30 Jan 2012 | 17:59
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Not only the numbers.
Like so many statistics these are particularly misleading.
Poor old Hoover really got the dirty end of the stick and there wasn’t much he could do about it. Nixon on the other hand did a great job and his successor reaped the benefits. Witness that Ford wasn’t there long enough to have made a real contribution. But while in office Nixon balanced the budget, withdrew from Vietnam and even put a man on the Moon! So he told a lie or two – how unusual for a politician!!
Reagan and G Bush both did a good job, but Clinton’s apparent success was down to him sowing the seeds of the current catastrophe. Slack money and unbridled spending together with big government – a chimera – and Brown copied it!
So you see the bald figures can often be misleading. If you are old enough to have witnessed it all at first hand you are able to take a more considered view. So perhaps the Bespoke Investment Group needs to let their seniors edit was the college boys churn out.
Posted by: Harry Katz
27 Jan 2012 | 16:50
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