Biden’s stock market record so far is the second-worst since Jimmy Carter

New York
CNN Business

The stock market under President Biden is starting to boom, but it’s heading into the midterm elections looking more like bankruptcy.

As of Monday, the S&P 500 is down 1.2% since Biden took office in January 2021. It marks the second worst performance in the president’s first 656 days in office since former President Jimmy Carter, according to CFRA Research.

Of the 13 presidents since 1953, Biden has ranked ninth in stock market performance by this stage in office, outperforming only previous presidents George W. Bush (32.8%) Carter (-8.9%) and Richard Nixon (-17.2% ) and John F. Kennedy (-2.1%), according to the CFRA.

By contrast, Biden’s immediate predecessors saw stock markets rally as they headed into their first midterm elections. The S&P 500 rose 52.2% during the first 656 calendar days in office of former President Barack Obama and 23.9% under former President Donald Trump, according to the CFRA.

Difficulties in the market are largely related to high inflation, which prompted the Federal Reserve to launch a barrage of punishing rate hikes.

Of course, the stock market is not the economy, nor should it be It is seen as a measure of judgment towards him. The good news for Main Street sometimes Wall Street treated it as bad news.

Despite the recent losses in the market, the job market remains historically strong. The unemployment rate is close to its lowest level in half a century and total employment has returned to pre-Covid levels.

Notably, stocks rose during the early days of the Biden era. The S&P 500 rose 27% in 2021 as the economy rebounded from Covid-19.

“The first year was great. Then we gave a lot of it,” said Sam Stovall, senior investment analyst at CFRA Research.

And because of the Fed’s all-out war on inflation, the S&P 500 is down 20% this year, on its way to its worst year since 2008.

The poor performance of the stock market under Biden is significant because many Americans are exposed to stocks, either directly or indirectly in their 401(k) plans and pensions. The sale this year has wiped out trillions of dollars from nest eggs, 401(k) and college savings plans.

Market turmoil is also eroding consumer confidence. A CNN poll found that 75% of potential voters You feel the economy is in a recession.

Some of the causes of the market sell-off in 2022 were largely outside Biden’s control, including the Russian invasion of Ukraine, Covid-related supply chain headaches and the Federal Reserve’s belated response to inflation.

Other factors, such as whether Biden overestimated an already strong economy with the US bailout, will be debated by economists for many years to come. (a paper of the Federal Reserve Bank of San Francisco argues that the fiscal support may have helped increase inflation).

The stock market is likely to recover from recent losses – especially if the US avoids a recession or inflation is calm enough to allow the Federal Reserve to stop reining in the economy. Goldman Sachs told clients on Monday that it “Very reasonable” The Fed tames inflation without causing a recession.

On the other hand, retirement accounts can shrink even more in the event of a recession.

“We don’t think it’s over,” Stovall said. “There’s a good chance the bottom might not be there.”

Bosses often get a lot of credit when things go right and a lot of blame when things go wrong. But the market’s lackluster performance under Biden reflects the broader economic challenges casting a shadow on voters’ minds in this midterm election.

Correction: An earlier version of this article incorrectly stated the number of calendar days in the analysis as well as the performance of the stock market under various US presidents during that period.

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