President Biden is wrapping up a historic first 100 days as president of the United States. With the Dow up 3375 points, or 11%, it would be the second best 100 days' performance in 100 years — handily beating the median Dow return of 2% and the average of 5%. Only former President Franklin D. Roosevelt's sky-high return of 75% in the 1930s fared better.
"Love him or hate him, stocks have voted and they love him... Considering stocks also had their best rally ever from Election Day until the inauguration, the bulls have to be smiling under President Biden," said Ryan Detrick, chief market strategist and senior vice president at LPL Financial.
But the president is not the stock market, so they say. Former President Trump famously made a point to establish the stock market as his report card on the economy — a departure from most of his predecessors. But it was Franklin D. Roosevelt who coined the phrase "first 100 days" and arguably spearheaded the most legislation in that time frame that reverberated throughout the U.S. economy in subsequent years.
When Roosevelt took office on March 4, 1933, the country was mired in the years-long Great Depression. Roosevelt immediately closed the banks and the stock market. When stocks reopened for trading 12 days later, the Dow soared a record 15% that first day. Roosevelt also convened Congress to a special three-month session in which they passed a record 76 laws.
Since Ronald Reagan became president in 1981, the Dow has turned in a positive annual performance 30 out of 40 times, or 75%. But the global and U.S. economies were in vastly different states for each of the seven presidents since then.
For instance, in the chart above, former President Obama stands out as having presided over the only negative first 100 days in the last four decades — which is understandable considering that he inherited the worst economy since the Depression when he entered office in 2009.
Notably, stocks did bottom in March that year, kicking off what some define to be the longest bull market in history. But that March liftoff was fueled in large part by the Federal Reserve massively upping its quantitative easing commitment. Fed Chairman Bernanke was a holdover from the George W. Bush administration at the time, and Fed monetary policy is purposefully designed to be independent from the rest of the government.
All of this speaks to the difficulty in ascribing stock performance to any limited data sets or policy initiatives. "I don't tend to put a high percentage weight on any political figure as it relates to the stock market. There are so many forces that impact the stock market, and I think whether you're during an election period, and the immediate aftermath of an election — even 100 days after — there's an attempt to connect those dots directly," Liz Ann Sonders, chief investment strategist at Charles Schwab, told Yahoo Finance Live this week.
Sonders uses Trump as an example. "[T]think about the narratives that were in play when President Trump won in 2016 — that this was going to be fantastic for sectors like financials and energy in terms of deregulation. Yet those were the worst performing sectors for four years."
Biden was the opposite, said Sonders, who many expected to be a headwind for energy and financials. Instead, they're the top two performing sectors this year, with the Energy Select Sector SPDR Fund (XLE) up 26% and the Financials Select Sector SPDR Fund (XLF) up 20% over that time.
Sonders breaks down the non-intuitive sector moves. "[It's] not because either of them shifted gears in terms of the policies they were proposing. Just that there are forces, I think, much more dominant long-term and powerful that drive markets. Politics can be a portion of it, but too often they're pinpointed as if that's the primary driver. And you have 100 years of history to suggest that there are other factors that ultimately take precedence in terms of what truly drives markets."
Jared Blikre is an anchor and reporter focused on the markets on Yahoo Finance Live. Follow him @SPYJared