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Monday
Oct222012

Equity Markets Under Obama

In this Sunday's New York Times, there was an article titled, "Wall St. May Not Cheer, but Obama's Been Good for Stocks" by Jeff Sommer that discussed the performance of the Dow Jones Industrial Average (DJIA) during President Obama's first term in office.  The article quoted a report we published in early September that we updated through Friday.  The thrust of the story was that although Wall St. and President Obama have had a tenuous relationship since he took office, the stock market has done very well while he has been President.  As shown in the chart below, through Friday afternoon the DJIA was up 67.9% since 1/20/09.  That qualifies as the fifth best of any US President since 1900.  The only four US Presidents who saw a greater return during their first 1,368 days in office were FDR (238.1%), Clinton (88.0%), Coolidge (86.2%), and Eisenhower (68.8%), all of whom were re-elected.

While economic numbers have not seen much improvement under President Obama, the stock market has certainly been working in his favor.  While the stock market isn’t a complete reflection of the economy, it is an important indicator, and since we first published this chart, we noted that it is the one chart that Republicans don't want the public to see (and that Democrats should be highlighting).  Unfortunately for the President, though, Wall Street is not very well regarded by the public these days (hence the reason it is so easy for politicians to deride it).  As a result of Wall Street's shortcomings in the category of popularity, there has been little talk of the rally in the stock market under President Obama in any of the prior debates.  Given the fact that tonight's debate is focused on foreign policy, this is most likely to remain the case.