Since his election, Joe Biden has been good news for investors.
Between election day on November 3 and today, the S&P 500 index rose 14.3%. The gain is the best between election day and inauguration for any first-term president since World War II, according to a report by CFRA Research, a New York investment research firm.
After an initial increase after the election, the market cooled slightly. There were lower expectations due to concerns about the availability of Covid-19 vaccines and new restrictions related to the coronavirus in several states. In early January, investors had already considered the distribution of vaccines and the likelihood that the Biden government would raise corporate taxes, which would affect spending and earnings expectations for 2021. And President Donald Trump was still a big source of uncertainty.
“There was a real concern about what he could do and if he wouldn’t leave,” said Hilary Kramer, investment director at Kramer Capital Research based in New York. Then, on January 6, Democrats won both Georgia seats in the Senate, Trump supporters attacked the U.S. Capitol building, and several Republicans spoke out against the Republican president, reducing investor concerns that Trump would continue to interrupt. the transfer of power. “In an ironic way, January 6 and the Capitol riots really changed things; and the market took off, ”said Kramer.
Biden’s effect on the stock market so far could bode well for investors in the coming months. The data shows that, on average, the S&P 500 increases 2.1% during the first 100 days of a first-term Democratic president’s term, compared to the same period for a Republican administration in his first term, according to the CFRA.
Still, the fall in the market this year is almost certain and could happen soon. For most of the years since World War II, the index has dropped to a point below where the year began. More than half of those losses occurred in the first quarter of the year, according to Sam Stovall, CFRA’s chief investment strategist.