Obama poll stock market drop since
While the economic recovery under President Obama has been sluggish and underwhelming , slow and disappointing are hardly words you would use to describe the stock market's performance under the outgoing president.
Since Obama's first inauguration on Jan. To put that in perspective, those price gains were nearly four percentage points per year more than domestic equities have averaged since the end of World War II. They also compare favorably to the 4. Here's one other way to think about it: If during the upcoming administration of President-elect Donald Trump, the stock market were to replicate the success it enjoyed under Obama, rising by a factor of 2.
How Obama Stacks Up Historically.
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The stock market's performance in the two terms under Obama represents "the second best run under a Democrat president," trailing only the Among all presidents, the market's annualized gain under Obama ranks third behind Clinton and Gerald Ford -- although Ford presided over less than a single term.
Equities also gained nearly three percentage points more annually under Obama than under Ronald Reagan -- who, along with Clinton, is widely perceived as having been history's biggest benefactors to Wall Street. How is that possible?
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Unlike Reagan, who not only presided over a major bull market but also a couple of big stock slides -- the downturn and the October crash -- Obama's entire presidency unfolded in a bull market. Can Obama Take the Credit?
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Many market observers have pointed out that the stock market's run under Obama may not have been all or even mostly Obama's doing. The 44th president of the United States got a huge assist from the Federal Reserve, which took the unusual position of keeping short-term interest rates near zero for almost the entire duration of Obama's two terms.
The Fed, in fact, only lifted rates two times -- for a total of half a percentage point -- near the end of the Obama administration.
How the stock market performs on, and after, Election Day - MarketWatch
That unprecedented policy, which was enacted to prevent the economy from slipping into a deflationary spiral in the aftermath of the global financial crisis, was designed to promote risk taking in the economy. Investors who were earning virtually nothing by parking their money in cash or government bonds were forced to plow their money into equities to generate any return to speak of -- and that gave the markets a lift.
Making American Stocks Great Again. While interest rates have been at record lows around the world, the fact remains that U. A big reason for that poor performance: Despite China's rapidly expanding economy, that country's equities gained only about a third as much as American equities.
Russian shares fared even worse, meanwhile, losing more than a third of their value over the course of Obama's two terms. Why You Aren't Happier About the Market. Despite the strong gains in the stock market, investors' enthusiasm has consistently been tepid throughout the Obama years.
Meanwhile, Americans' ownership of equities has dwindled. You can chalk up a lot of this so-called enthusiasm gap to the sluggish economy and what had been a disappointing job market up until the last couple of years, with investors less likely to trust the market with their money.
Then again, there are other ways to measure investor sentiment. One is to look at the actual value that investors are placing on their investments -- that is, the amount that investors are willing to pay for each dollar of earnings. And by that token, actual investor enthusiasm has soared under Obama.
There have only been three other times in history that investors were willing to pay this much for stock earnings -- in the years leading up to the Great Depression, right before the Internet bubble in the late s, and just before the financial crisis a decade ago.
That doesn't necessarily bode well for stocks going forward.
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