The equity markets were on a roller coaster ride the past week as they took a plunge on Monday due to fears that Evergrande, China’s second largest property developer, would default on its debt leading to slower growth in China. Concerns about the U.S. government reaching its debt ceiling and when the Fed will start tapering also played in the market’s gyrations.
After digesting all this, the markets rallied to close higher for the week with the Dow and S&P 500 up 0.6% and 0.5%, respectively, while the Nasdaq was flat. However, these and other issues, such as the continued impact from the Delta coronavirus variant, could lead to more volatility until a large number of companies report September quarter results in the second half of October.
Stocks have performed better under Biden than Trump
Even with the recent weakness in the equity markets during September, by President Trump’s favorite measure of success President Biden’s post-election stock market gains have beaten Trump’s equivalent ten plus month’s returns.
Using the returns from the time the election was called in Biden’s favor to late September vs. when Trump was called the winner the evening of his, the Dow, S&P 500 and the Nasdaq have risen by 0.9%, 10.0% and 2.8% more under Biden, respectively. In absolute returns they have risen 22.9%, 27.0% and 26.5%, respectively.
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It is only using inauguration dates that Trump’s Dow and Nasdaq returns are ahead of Biden’s by 0.8% and 2.0%, respectively, but Biden’s S&P 500 return has returned 6.7% more than Trump’s. The stock market has not crashed under Biden as Trump predicted as seen in this debate video.
Biden’s and Trump’s Dow performance are very similar
On the Tuesday in 2016 the election was held between Donald Trump and Hillary Clinton the Dow 30 Industrials closed at 18,333. The Index responded positively to Trump’s victory, called on the same evening, and continued on a fairly steady uptrend into late September 2017.
- From Tuesday, November 8, close: Up 4,017 or 21.9%
- From January 19 (the day before the Inauguration): Up 2,617 or 13.3%
On the Tuesday of the election between Trump and Biden the Index closed at 28,323. It also increased the next three days with Biden in the lead but it had not been called. The Monday after the election was called the Index gapped upwards and rose until August until hitting some weakness in September. Biden’s returns have been better by 0.9% than Trump’s from when the election was called but is 0.8% less than the previous President from inauguration dates.
- From Tuesday, November 3, close: Up 7,318 or 26.6%
- From Friday, November 6, close: Up 6,475 or 22.9%
- From January 19 (the day before the Inauguration): Up 3,867 or 12.5%
The S&P 500 is Biden’s largest outperformance vs. Trump
Trump saw a smaller gain in the S&P 500 vs. the Dow 30. It rose 17.0% from his election day and 10.5% from his inauguration to late September 2017.
- From Tuesday, November 8, close: Up 363 or 17.0%
- From January 19 (the day before the Inauguration): Up 239 or 10.5%
Between Biden’s election and last Friday the S&P 500 returns were better than the Dow’s. Biden’s market returns were again substantially above Trump’s by 10.0% from when the election was called and 6.7% from his inauguration.
- From Tuesday, November 3, close: Up 1,086 or 32.2%
- From Friday, November 6, close: Up 946 or 27.0%
- From January 19 (the day before the Inauguration): Up 657 or 17.3%
The Nasdaq’s performance is split between Biden and Trump
The post-election to late September timeframe saw the Nasdaq with the highest performing Index for Trump, coming in at 23.7%, but was still short of Biden’s 26.5%.
- From Tuesday, November 8, close: Up 1,233 or 23.7%
- From January 19 (the day before the Inauguration): Up 887 or 16.0%
Trump’s return of 16.0% since his inauguration is the metric that has the best outperformance vs. Biden at 14.0%.
- From Tuesday, November 3, close: Up 3,887 or 34.8%
- From Friday, November 6, close: Up 3,152 or 26.5%
- From January 19 (the day before the Inauguration): Up 1,851or 14.0%