Obama and The Market: The First Three Years
Bespoke Investment Group
January 23, 2012
This weekend marked the third anniversary of President Obama's inauguration as the 44th President of the United States. While his critics argue that Obama is one of the most anti-business Presidents in US history, a look at the equity market's performance since Obama was inaugurated shows a different picture.
The chart below is from our 2012 Bespoke Report, and it shows the performance of the DJIA during the first three years of each US President since 1900. In each case, we calculated the performance of the DJIA starting from the President's first full day in office, and for those Presidents who were in office for less than three years, we provide the Dow's performance during their entire time in office. Obviously, since Election Day is months before the actual inauguration, one could argue that you should measure the market's performance starting from each President's election, but then you run into problems with Presidents who weren't actually elected, Presidents where the winner was not known until weeks after Election Day (Bush II), or Presidents who won by landslides where the winner could have been accurately predicted weeks or months before Election Day. So for the sake of simplicity and consistency, we used their first full day in office as our starting point.
As of last Friday, the DJIA has now risen 60% under President Obama, making him one of only five Presidents to see the Dow gain 50% or more in their first three years in office! Ironically, even though Republicans are usually considered more business friendly and better for the equity market, of the five Presidents where the DJIA rallied 50% or more, three were Democrats (FDR, Clinton, Obama) and only two were Republicans (Coolidge and Eisenhower). After last Friday's rally, Obama moved narrowly ahead of Clinton in terms of market performance in his first three years in office with a gain of 60.0%.
(c) Bespoke Investment Group