The question of which U.S. president would be better for the stock market is a complex one, as it depends on various factors such as economic policies, market regulation, and global events during their administration. Here are some key points to consider:
- Historical Performance:
- Democratic presidents have generally outperformed Republican presidents in terms of stock market returns since 1947. The average annual return under Democratic presidents is 10.8%, compared to 5.6% under Republican presidents1.
- Within the post-World War II era, the best stock market performance was under Bill Clinton, with the S&P 500 up 210% from 1993-20011.
- Economic Policies and Market Regulation:
- Presidents can influence the economy and the stock market through their policies and the appointment of key officials like the head of the Federal Reserve, who sets monetary policy2.
- The president's control over business and market regulation can also impact the stock market2.
- Impact of Global Events:
- Presidents may face unexpected global events that can affect the stock market, such as wars, trade disputes, or natural disasters3.
- How a president responds to these events can influence the stock market's reaction. For example, the stock market may benefit from stability and proactive measures to address economic challenges2.
- Investor Sentiment and Market Psychology:
- Investor sentiment can be influenced by the perceived leadership qualities and policies of a president. For instance, fiscally conservative policies may be favored by some investors, while others may prefer a more activist approach to economic intervention4.
- Recent Performance:
- President Biden's administration has seen a 34% return for the S&P 500 since his inauguration, despite challenges such as inflation and geopolitical tensions1.
- Historical performance suggests that the next Democratic president is likely to perform well in terms of stock market returns1.
In conclusion, while it is difficult to predict with certainty which president would be better for the stock market, historical trends and the potential for effective economic policies and market regulation under a Democratic administration suggest they may be more favorable for stock market performance. However, it is important to consider the specific policies and global events that could occur during any presidency, which could alter this conclusion.