The S&P 500 Index, which is normally considered the best barometer of the US stock market, reached its Obama Presidential Term low market price close of 676.53 on March 9, 2009.
And it’s most recent market price on August 31, 2012 was 1,406.58, an increase of a truly remarkable 108% in less than 3 ½ years.
This massive stock market price advancement is only logical, since corporate earnings drive stock prices, and corporate earnings were absolutely on fire during 2010 and 2011, and particularly so in 2010, when the US House was under Democratic control.
I have shown in my most recent post that the 952 Largest Corporations, with Ongoing, Core Pretax Income or Pretax Loss of at least $10 mil in any of the most recent three fiscal years, in the 11 Largest US Battleground States, generated Total Ongoing, Core Pretax Income of $298 bil in fiscal year end 2011, which was an off-the-charts increase of 241% over the $87 bil earned just two years earlier in 2009.
And the Largest Corps in the other 39 US States have also had triple-digit, blow-out total earnings growth in the most recent two fiscal years.
Despite this massive 108% US Stock Market growth, the question I have to raise is…..Shouldn’t it be even much higher? After all, the 241% total earnings growth is more than double the overall US stock market price growth.
Anyway, the focus of this post is on which US Presidential Terms had the best and the worst stock market changes since the early 1950s?
It probably doesn’t surprise many that the average of the two Bill Clinton Presidential Terms is at the top of the list at a truly remarkable 75.7%.
It probably would surprise many that second on this list is Barack Obama’s current Presidential Term, with a stock market increase of 65.5%, and there are more than four months left in his term. Thus, on a full-term annualized basis, the stock market increase during Obama's Presidential Term is 72.5%.
And frankly, I think that with John F Kennedy’s willingness for bold US economic stimulus, including the very stimulative investment tax credit and accelerated tax depreciation, he would have been third on this list, if his Presidency wouldn’t have been cut short.
I think that one big surprise here is that the top Republican Presidential Term in average stock price upward movement is not Ronald Reagan’s, but rather Ike’s. And another surprise is that even George Bush I topped Ronald Reagan.
I do find it interesting that Ike’s Presidential Term was renown not just for the massive US infrastructure highway build out, but also for an extremely high top personal income tax rate and an extremely high top corporate income tax rate.
The very steep top income tax rates of 91% for individuals and 52% for corporations during Ike’s two Presidential terms certainly didn’t deter the stock market, which averaged an increase of 52.8% per term during Ike’s two terms.
And the stock market certainly also wasn’t deterred when the top individual income tax rate was increased from 31% to 39.6% during Bill Clinton’s first Presidential term.
And the top individual income tax rate was raised during George Bush I’s Presidential term, and he is still 4th on the below list, sandwiched between Ike and Reagan.
Below here are the Average S&P 500 Stock Index Percentage Changes for each Single Presidential Term since the early 1950s:
| 1 | Clinton | 75.7% |
| 2 | Obama | 65.5% |
| 3 | Ike | 52.8% |
| 4 | Bush I | 51.7% |
| 5 | Reagan | 47.5% |
| 6 | JFK/LBJ | 44.9% |
| 7 | Carter | 29.4% |
| 8 | LBJ | 17.8% |
| 9 | Nixon | 16.4% |
| 10 | Nixon/Ford | -12.6% |
| 11 | Bush 2 | -20.0% |
And below here are the S&P 500 Stock Indices on the most recent date before each next Presidential Inauguration:
| Most | Presidential | ||
| Recent | Term | ||
| Date | S&P | ||
| Before | 500 | ||
| Next | S&P | Index | |
| Presidential | 500 | % | President's |
| Inauguration | Index | Change | Term |
| 8/21/2012 | 1,406.58 | 65.5% | Obama |
| 1/19/2009 | 850.12 | -28.2% | Bush II |
| 1/19/2005 | 1,184.63 | -11.8% | Bush II |
| 1/19/2001 | 1,342.54 | 73.0% | Clinton |
| 1/19/1997 | 776.17 | 78.4% | Clinton |
| 1/19/1993 | 435.13 | 51.7% | Bush I |
| 1/19/1989 | 286.91 | 67.5% | Reagan |
| 1/19/1985 | 171.32 | 27.5% | Reagan |
| 1/19/1981 | 134.37 | 29.4% | Carter |
| 1/19/1977 | 103.85 | -12.6% | Nixon/Ford |
| 1/19/1973 | 118.78 | 16.4% | Nixon |
| 1/19/1969 | 102.03 | 17.8% | LBJ |
| 1/19/1965 | 86.63 | 44.9% | JFK/LBJ |
| 1/19/1961 | 59.77 | 33.9% | Ike |
| 1/19/1957 | 44.64 | 71.6% | Ike |
| 1/19/1953 | 26.01 |
If Obama is reelected, the US House is returned to Democratic Control, and the US Senate remains in Democratic Control, very effective, prudently-designed, bold, high job-creating US economic stimulus will be enacted, and I think it will truly be a horse race as to who finishes on the top of this stock market price movement list at the end of Obama’s second term.
When I do the math, the S&P 500 Index, which is now at 1,406.58, would have to be at about 2,625 on January 19, 2017 for Obama to top Clinton’s 75.7% average Presidential term stock price index increase. My money is on Obama.
