President Donald Trump’s stock market stacks up well against the majority of his presidential predecessors.
The S&P 500 has returned more than 50% since Trump was elected, more than double the 23% average market return of presidents three years into their term, according to data from Bespoke Investment Group dating to 1928.
The bellwether index gained more than 28% this year, well above the average 12.8% return of year three for past U.S. presidents.
“Year three has been by far the best year of the cycle with an average gain of 12.81%, and the playbook has stuck to the script in year three of the current cycle,” the firm said in a note to clients last month.
Trump’s third year is above average, but not the best of any past president. In 2013, former President Barack Obama’s stock market returned more than 32%, as the economy bounced back from the Great Recession.
A strong fourth year?
If history is any guide, Trump is in for another strong year in 2020.
Stocks are up in year four more than 66% of the time and the S&P 500 returns an average of 5.7%, according to Bespoke.
Much of these stock gains will depend on how trade talks go with China. Earlier this month, the countries announced a “phase one” trade deal in which China agreed to buy billions in U.S. agricultural products and the U.S. agreed to cancel a round of tariffs. For the most part, stocks shrugged off the deal due to its lack of clarity and uncertain path to phase two.
While Trump is confident about a strong market next year, Wall Street is forecasting much more modest gains. The average S&P 500 target for 2020 among analyst on Wall Street is 3,330, less than 4% higher than Tuesday’s close. Trump will need a 6% gain in the S&P 500 to beat the average presidential return.
Reference: CNBC
Thai
Eng