The race for president is getting close, and both Kamala Harris (D) and Donald Trump (R) are likely to use exaggerated claims about their track records on economic problems as the race gets closer. What does the market say?
As of Thursday night’s close, the S&P 500 SPX 0.61% had gained 50% since President Joe Biden and his vice president, Harris, took office on January 20, 2021.
It’s a big jump in just over three and a half years, especially considering that the stock benchmark fell 19% in 2022 because the Federal Reserve tried to fight inflation by raising interest rates.
It’s also slightly less than the S&P 500’s advance of 53% at the same stage in Trump’s term, as shown in the table below. Trump’s last year in office was marked by stocks diving as uncertainty related to the COVID-19 pandemic took hold, but the S&P was back at new highs by August 2020.
What should people who want to invest think about these records?
Ed Mills, managing director and Washington policy analyst at Raymond James, said, “My overall view is that the stock market can do well regardless of who’s president. I hope that we can move away from the idea that the market’s performance is kind of dictated by who’s sitting in the White House.”
Mills said that the government in power and the people who live in the White House are two things that affect the market DJIA 0.97% COMP 0.33%, but there are many more. At the same time, he said, heavy spending has been a big part of the last two governments. MarketWatch quoted him as saying, “Since the start of COVID, the federal government has approved about $8 trillion more than we normally spend. This was true under both Trump and Biden, so that’s why I think the market’s up.”
Another thing Mills said was that the market would probably see a Harris presidency as keeping things the same, but it would rest on how much she sticks to Biden’s positions.
A RealClearPolitics moving average of polls in key states as of Friday shows that Trump has a slight edge over Clinton by 0.4 percentage points with less than four weeks to go until the election.
