Biden’s First 100 Days Have Been Great for the Stock Market. What History Says Happens Next.
President Joe Biden on Oct. 29, 2020.
JIM WATSON/AFP via Getty Images
Joe Biden’s 100th day in office is this Thursday, and the stock market is on pace to record its best start to a president’s term since that of Franklin D. Roosevelt in 1945. The S&P 500 index is up nearly 9% since inauguration day, trailing FDR’s fourth term by about a percentage point.
Of course, there are a multitude of influences that determine what the stock market does over any period, and the impact of any particular president or another is debatable. Continued easy monetary policy, the rollout of Covid-19 vaccines, and a string of strong economic data and corporate earnings reports are among the bullish forces that have underpinned the rally in recent months.
The S&P 500 index has climbed an average of 3.8% in the first 100 days of the 24 presidential terms since 1929, according to Dow Jones Market Data. That’s an annualized rate of about 14.5%—well ahead of the S&P 500’s 6% average annual rise since its inception.
The first few months of the year tend to be a better time for stock returns in general, as corporate management teams give guidance for the year ahead and investors price stocks on higher estimates. In a new presidential term, the administration’s to-be-realized plans might inspire a bit more investor optimism.
The S&P 500’s historical track record for the next 100 days of presidential terms is even better: The index has gained 4.8% on average in that time frame. Its returns in that period have been similar on average whether the S&P 500 rose or fell in the president’s first 100 days.
The S&P 500 has been up 14 of 24 first 100 days of a president’s term since its inception, including 9 of 13 Democrats and 5 of 11 Republicans. The index has risen an average of 7.3% under Democrats’ first 100 days and slipped 0.4% under Republicans’.
FDR died in April 1945, before the 100th day of his fourth term in office, when the S&P 500 had gained just over 10%. That rise pales in comparison with FDR’s first term in 1933, with the index up nearly 80% in 100 days. The market was rebounding from successive selloffs to start the 1930s, but it still wouldn’t regain its pre-Great Depression high until the early 1950s.
The S&P 500’s worst start to a presidential term also came during FDR’s presidency, in 1941. It lost 10.1% in the first 100 days of his third term.
The index is on a winning streak among new presidents. It rose 2.8% and 7.5% in the first 100 days of Barack Obama’s first and second terms, respectively, and 5.3% to start Donald Trump’s presidency in 2017.
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