President Donald Trump wants you to think that the stock market is hitting record highs because he’s in office.
In a recent tweet, he even went as far as to characterise the post-election stock rally as “virtually unprecedented,” and criticised the so-called “Fake News Media” for not reporting on it.
Business Insider took that to heart, and dissected Trump’s claims that he’s catalyzed stock market records. The final conclusion was that while he drove some periods of gains, there were many other times when the market climbed higher for other reasons entirely.
Now we’re here to test the mettle of Trump’s argument that the stock market has rarely surged this much following an election.
As it turns out, you only have to go back to… (drum roll)… the period after the 2012 election to find a comparable period of stock market strength. That’s right, the S&P 500 climbed 19.2% during the span from Barack Obama’s re-election through October 11, 2013 — almost exactly same move that we’ve seen since Trump took office.
But surely that’s the only instance of such a rally, right? Nope. As you can see in the chart above, the S&P 500 has rallied more than 19% on four out of 14 occasions, dating back to the election of John F. Kennedy in 1960. And three of those times, the index spiked more than 23%.
So while the definition of “unprecedented” is certainly subjective, it can be safely concluded that both similar and superior rallies have followed presidential elections.
With all of that said, the question that must be asked is: How much are post-election returns dictated by whether stocks are already in a bull market? After all, the currently bull period was roughly 7 1/2 years into its run when Trump won the 2016 election.
As you’ll see in the chart above, other major post-election rallies corresponded to bull market stretches, most notably the 35% spike enjoyed by Bill Clinton to start his second term. That was in 1996 and 1997, when the stock market was firmly locked into its longest bull market on record.
Between this analysis and our findings from Wednesday, maybe it’s time to conclude that presidents don’t really have a huge hand in determining stock gains after all.
(Bob Bryan contributed reporting. Check out his coverage of Trump’s policies here.)
It would be really nice if the Fake News Media would report the virtually unprecedented Stock Market growth since the election.Need tax cuts
— Donald J. Trump (@realDonaldTrump) October 11, 2017