Reminder About The Stock Market and President Obama

[BarryLaverty]

He did it better than Trump...or at least compared to what's happened so far. 

https://www.forbes.com/sites/chuckjones/2020/01/14/obama-had-more-stock-market-records-than-trump/#3e812b3d6684

EDITORS' PICK44,936 viewsJan 14, 2020, 11:21am

Obama Had More Stock Market Records Than Trump

 

Chuck JonesSenior Contributor 

Markets

I cover technology companies, worldwide economies and the stock market

Wall Street's famous Charging Bull. (Photo by William Volcov/Brazil Photo Press/LatinContent/Getty ... [+]

 2017 BRAZIL PHOTO PRESS

Investors will probably be surprised that during Obama’s Presidency the Dow 30 Industrials had more record closes than Trump has had, 118 vs. 117. While it is true that Trump has only been in office for three years vs. Obama’s eight, as you can see in the graph below Obama’s market had to recover from the Great Recession and its impact on stock prices.

Dow Jones Industrials under Obama and Trump

 STOCKCHARTS.COM

Stock market under Obama

The Great Recession officially started in December 2007, about a year before Obama became President and two months after the Dow 30 Industrials hit an all-time high of 14,165. The Dow then fell over 50% to 6,547 in March 2009, which was three months before the recession officially ended .

US President Barack Obama. (Photo credit: NICHOLAS KAMM/AFP via Getty Images)

 AFP VIA GETTY IMAGES

It took from January 2009 until March 2013 for the Dow Industrials to regain its previous high. It then started a string of 50 new highs in 2013 and 38 in 2014. The Dow reached new highs the remaining two years while he was in office and another one in his last month.

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Dow Industrial new all-time highs

 BLOOMBERG PROVIDED BY MICHAEL O’ROURKE AT JONES TRADING

Over the last four years of Obama’s Presidency the Dow reached 118 new highs and finished at 19,732. Another interesting statistic is that the Dow surged 11,783 points while Obama was in office rising from 7,949 the day of his inauguration to 19,732, a 148% increase over the eight years. It also rose by 13,185 points from its March 2009 low.

Stock market under Trump

When Trump entered office he benefited from an economy that was in its eighth year of growth, a stock market that had been consolidating for about two years and was close to an all-time high. Making new highs is much easier in this situation vs. the one that greeted Obama when he took office.

U.S. President Donald Trump. (Photo by Mark Wilson/Getty Images)

 GETTY IMAGES

Starting with Trump’s inauguration in 2017, the stock market was helped by the outlook for large tax cuts for corporations and the subsequent positive impact to earnings. This led to 71 new highs in 2017 but after the sugar rush of the tax cuts wore off there were only 19 and 22 new highs in 2018 and 2019, respectively. Including the 5 new highs in 2020 gives Trump a total of 117.

The numbers do tilt in Trump’s favor when you end Obama’s run on November 8, 2016, when Trump was elected. The Dow reached 18 new highs between his election and inauguration, which would change the totals to 100 vs. 135. I would not be surprised to see the markets record additional new highs as long as the Fed pumps money into the economy.

Earnings impact on stock prices

To get a feeling for how profits impact the stock markets, I am using the S&P 500 earnings from FactSet as they are publicly available and updated frequently for this analysis. It is interesting to see how the growth, or sometimes no growth, impacts the number of times the markets hit new highs.

After the stock markets recovered from the downturn created by the Great Recession, from 2009 to 2012 earnings moved consistently higher until 2014. This led to 50 and 38 record highs in 2013 and 2014, respectively.

As earnings flattened out from in 2015 and 2016 there were still new highs but the number of them declined. In 2017 the prospect of a large corporate tax cut provided a large amount of momentum to the markets, even though earnings did not move meaningfully higher until 2018.

Once the tax cuts benefits were baked into earnings forecasts, the number of new highs diminished in 2018 and 2019, coming in at 19 and 22, respectively.

S&P 500 earnings and number of new Dow 30 Industrials highs by year

 FACTSET

 

 

[Wild74]

You wait for a downturn to make this point...lol  why not make it last week when the DOW was at a all time record... The economy is the best it has been in 20 years and once this flu scare is over it will be back in record territory.  

[Wild74]

Turn those machines back on

[Wild74]

Do not sell! It will come back. "The time to buy is when there is blood in the streets"

[DaveTV1]

10 minutes ago, Wild74 said:

Do not sell! It will come back. "The time to buy is when there is blood in the streets"

I think it's too late to sell after today.  I would wait until the coronavirus scare is over.  We've all seen it before this is nothing new.  

[Wild74]

1 minute ago, DaveTV1 said:

I think it's too late to sell after today.  I would wait until the coronavirus scare is over.  We've all seen it before this is nothing new.  

I did alright most of my money is in Stability and Fix Rate Bonds but I took a beating on my S&P 500 stock only have about 10 % in that fund. 

[DaveTV1]

8 minutes ago, Wild74 said:

I did alright most of my money is in Stability and Fix Rate Bonds but I took a beating on my S&P 500 stock only have about 10 % in that fund. 

If you have any extra money to invest I would start doing so around late April early May, then sell off come October or early November if the virus is still around.  People tend to not come down with as many ailments in the summer.  I do know however that when we do get sick in the summer it seems far worse.  That's because our genes change with the seasons to better protect our bodies.  God knows what He's doing when it comes to His creations.  This isn't from evolving, because it would take too long for that to occur.   https://www.askmen.com/news/sports/science-reveals-why-don-t-we-get-sick-in-the-summer.html