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 its most recent market price close today Friday, January 18, 2013 is 1,485.98, an increase of a truly remarkable 120% in less
than 4 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.
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 a very close second
on this list is the late-closing Barack Obama’s current First Presidential Term, with a stock
market increase of 74.8%.
Rounding out the Trifecta as a distant third is Eisenhower's average Presidential term stock market increase of 52.8%, which just nosed out Bush I's Presidential term stock market increase of 51.7%.
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.
And after the top individual income tax rates were raised on the very wealthy during the latter part of the Obama Administration, the stock market has moved up nicely again.
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 | 74.8% |
| 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 II | -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 |
| 1/19/2013 | 1,485.98 | 74.8% | 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 the US House is returned to Democratic Control in 2015, and
the US Senate also remains in Democratic Control in 2015, very effective,
prudently-designed, bold, high job-creating US economic stimulus will be
enacted, and I think you'll see Obama being at the very top of this stock market Presidential list. Obama would need the stock market increasing by about 77% during his Second Presidential Term to finish at the very top of this list. I am pretty sure it will easily happen. I would be surprised if the stock market didn't double in the Second Obama Presidential Term. And this time, there will be a much more equitable sharing of economic gains between the wealthy and everyone else.
On the other hand, if either the US House remains in Republican Control in 2015, or if the US Senate switches to Republican Control in 2015, Clinton will remain on the top of the stock market Presidential list. In this case, the stock market will move up, but only by about 50%, during Obama's Second Presidential term. But on the big downside, you'll see nearly all of the fruits again going to the very wealthy, with much of the rest of the country again getting shafted.
