How the U.S. stock market has treated new presidents
By Saqib Iqbal Ahmed NEW YORK (Reuters) - President-elect Joe Biden is likely to start his term faced with the worst public health crisis in decades and an economy still reeling from a sharp coronavirus-led contraction earlier this year. U.S. stocks, however, have surged in recent days, fueled by ebbing election uncertainty and hopes that a vaccine against COVID-19 will eventually help to curb paralyzing lockdowns and travel restrictions and bring life back to normal.
By Saqib Iqbal Ahmed
NEW YORK (Reuters) - President-elect Joe Biden is likely to start his term faced with the worst public health crisis in decades and an economy still reeling from a sharp coronavirus-led contraction earlier this year.
U.S. stocks, however, have surged in recent days, fueled by ebbing election uncertainty and hopes that a vaccine against COVID-19 will eventually help to curb paralyzing lockdowns and travel restrictions and bring life back to normal.
Here’s a look at how the markets have fared following previous presidential elections, as well as how stocks have performed in a new president’s first few months on the job.
(GRAPHIC: S&P 500 performance over first five trading days after election - https://graphics.reuters.com/USA-STOCKS/xklvybkzgpg/chart.png)
Dissipating election uncertainty and positive data from a late-stage COVID-19 vaccine trial boosted the S&P 500 a little over 5% in the first five trading days since the Nov. 3 vote, the index’s best post-election week performance in at least four decades.
THE IN-BETWEEN TIME
(GRAPHIC: Stock market from Election Day to inauguration - https://graphics.reuters.com/USA-STOCKS/ELECTION/yzdpxamygvx/chart.png)
Looking at the stretch between Election Day and the presidential inauguration, the market's surge in the months ahead of President Donald Trump's inauguration stands out.
The S&P 500 rose 5.8% with Trump as President-elect, stoked by bets that his promised tax cuts would boost growth and inflation.
Former President Barack Obama, on the other hand, was first elected as the U.S. economy was spiraling down into the Great Financial Crisis, accounting in part for the S&P 500's decline of 15.5% between his election victory on Nov 4, 2008 and his inauguration on Jan. 20, 2009.
While Biden’s interregnum period is off to a good start, investors see plenty of risks ahead. Those include a second wave of COVID-19 sparking fresh lockdowns throughout the United States, political uncertainty over Trump’s efforts to challenge election results, and Senate runoffs in Georgia scheduled for January that could give Democrats greater sway over that chamber.
THE FIRST 100 DAYS
(GRAPHIC: S&P 500 - First 100 days - https://graphics.reuters.com/USA-STOCKS/ELECTION/nmopaybgqpa/chart.png)
Stocks have typically given a warm welcome to new presidents, although it's hard to tell whether that performance has been spurred by the arrival of a new chief executive or simply a reflection of the market's tendency to trend higher over time.
The S&P 500 has risen in the first 100 calendar days of eight out of the last 10 presidential terms. But it has also gone higher in that period roughly 75% of the time in the last forty years, regardless of whether a new president had just been inaugurated.
(GRAPHIC: Fed's helping hand - https://fingfx.thomsonreuters.com/gfx/mkt/qzjvqargkvx/Pasted%20image%201604609874686.png)
The Federal Reserve will likely continue providing major support for markets at the start of Biden’s presidency, as it has for most of 2020. The central bank’s pledge to keep doling out stimulus to the economy has boosted investor confidence this year, and the Fed’s balance sheet is expected to grow to $9.1 trillion by Dec 2021, a recent Reuters poll showed.
(Reporting by Saqib Iqbal Ahmed; Additional reporting by Noel Randewich; Writing by Ira Iosebashvili, Editing by Nick Zieminski)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.