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Since his election, Joe Biden has been good news for investors.
Between election day on November 3 and today, the S&P 500 index climbed 14.3%. The payout is best between election and inauguration day for any first-term president since World War II, according to a report from CFRA Research, an investment research firm in New York City.
After a first surge after the election, the market cooled slightly. Expectations were lower due to concerns about the availability of Covid-19 vaccines and new coronavirus restrictions in several states. In early January, investors had already factored in the distribution of the vaccines and the likelihood that the Biden administration would raise corporate taxes, which would impact spending and income expectations for 2021. And President Donald Trump stayed on. a major source of uncertainty.
“There was real concern about what he might do and if he didn’t want to leave,” said Hilary Kramer, chief investment officer for New York-based Kramer Capital Research. Then on January 6, Democrats won Georgia’s two Senate seats, Trump supporters attacked the U.S. Capitol, and several Republicans spoke out against the Republican president, reducing investor fears that Trump would continue to disrupt. the transfer of power. “Ironically, January 6 and the riots on Capitol Hill really changed things; and the market took off, ”Kramer said.
Biden’s effect on the stock market so far could bode well for investors in the months to come. Data shows that on average, the S&P 500 increases 2.1% in the first 100 days of a Democratic president’s first term compared to the same period for a Republican administration serving its first term, according to CFRA .
Still, a market downturn this year is almost certain, and it could happen soon. For most of the years since World War II, the index has fallen to a point below where it started the year. More than half of those losses occurred in the first quarter of the year, according to Sam Stovall, chief investment strategist at CFRA.
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