Mon, January 30, 2023

Stock Markets and Trump Administration

U.S. President, Stock markets and risk factors

U.S. President Donald Trump likes how his presidency supported the stock market. The data from the Bespoke Investment Group supports his opinion about the stocks.

For example, the S&P 500 returned more than 50% since Trump became the president in 2017. It is worth mentioning; this number is more than double the 23% average market return in comparison with other presidents. Moreover, the Bespoke Investment Group compared the data which dates back as far as 1928.

Furthermore, the S&P 500 added more than 28% in 2019, well above the average 12.8% return of year three for past U.S. presidents.

Based on the note prepared by the investment group for its clients, the third year of Trump’s presidency is the best year of the cycle.

Stocks and main factorsRelationship between the stock market and politics

Several factors helped the stock markets. For instance, the S&P 500 reached more than 3,200 for the first time in history last week. Even though business investment suffered due to uncertainty regarding the trade war, business market investors are confident as they invested money into stocks.

Moreover, this year major stock averages attained all-time highs despite the concerns regarding the trade war.

Additionally, Trump’s market benefited from Federal Reserve Chairperson Jerome Powell and the central bank. This year, Federal Reserve lowered interest rates three times. Policymakers decided to cut rates for the first time since the end of the financial crisis.

Unemployment declined to the lowest point since 1969; this factor also helped to boost the stocks. In 2017, during his first year in office Trump made a decision to overhaul the tax system. As a result, companies repurchased a record number of shares with the extra money.

Next year will be his fourth in office; Trump is confident about a strong stock market. However, Wall Street is more careful when it comes to forecasts. The average S&P 500 target for 2020 among the analysts is 3,300, less than 4% higher than Tuesday’s result. In 2020, the S&P 500 should gain at least 6% to surpass the average presidential return.

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