Why the Stock Market Doesnt Like Republicans

[Hanna]

(snip)

A striking feature of the U.S. stock market is that it persistently does better under Democratic presidents than Republican ones. In a 2003 paper, Pedro Santa-Clara and Rossen Valkanov found that regardless of how they sliced the data, returns were substantially better for Democrats. Since then, with the poor returns under President George W. Bush and the strong returns under President Barack Obama, the effect has only become stronger.

Messrs. Santa-Clara and Valkanov couldn’t come up with a satisfactory explanation for the presidential puzzle. But in new research, University of Chicago Booth School of Business economists Lubos Pastor and Pietro Veronesi think they have come up with the answer.

The two economists created a model where people have a choice between being entrepreneurs and working for the government, and of voting for a political party that favors lower taxes or higher taxes. When risk aversion is low, more people want to be entrepreneurs and to vote for the low-tax party. When risk aversion is high, the opposite is true.

It is a highly simplified version of U.S. politics and economics. But the implications for stock prices are interesting. The low-tax party gets elected when risk aversion is low, and then if risk aversion merely returns to the mean, stocks suffer. For the high-tax party, the opposite is true.

More..

https://www.wsj.com/articles/why-the-st ... 1487351985

[Professor Fate]

At the closing bell 2/21/'17 20,743.00
At the closing bell 11/8/'16 18,332.26

+2,410.26 gain since Trump was elected.

Thanks President Trump!

Enough said.

[Omar Bongo]

Can you get Trump to declare victory after one month and go home too?

[Professor Fate]

At the closing bell 11/8/'16 18,332.26

At the closing bell 10/10/'17 22,830.68

Up 4,498.42 since Trump was elected.

Thanks President Trump!

Tired of winning yet?

[joefutbol]

What do you predict it will be at by the end of his term?

[Professor Fate]

If I knew that I'd be rich.

[Professor Fate]

The Dow is up another 85.24 today. 22956.96 Yet another all-time high. Who says you can't have your 401K and spend it too?

[Professor Fate]

How about now?

Dow is at 23,836.71

Up 5,504.45 since Trump was elected.

Tired of winning yet?

[Omar Bongo]

In ten months he's broken a multitude of campaign "promises" and accomplished exactly ZILCH, so it's not surprising you're desperately casting about for anything remotely resembling an accomplishment...congratulating Wall Street and corporate fatcats like Trump and his cabinet cronies for manipulating the financial markets so they can stuff their offshore accounts with cash while everything else is going to hell...priceless

[John Q. Public]

Dow up 18.0% since Trump was elected.

FTSE up 16.3% since Trump was elected.

Global Dow up 23.2% since Trump was elected.

DAX up 22.4% since Trump was elected.

Nikei up 22.9% since Trump was elected.

Hang Seng up 31.9% since Trump was elected.

WOOHOO! Way to go, Don!

[Professor Fate]

congratulating Wall Street and corporate fatcats like Trump and his cabinet cronies for manipulating the financial markets so they can stuff their offshore accounts with cash while everything else is going to hell...priceless

I am retired now, and have withdrawn 9% of my 401k this year, and yet my balance is higher than it was before those withdrawals. Like I said in an earlier post...Who says you can't have your 401k and spend it too?

[Omar Bongo]

You already tried this in another thread ...short term memory issues?

[John Q. Public]

Imagine if you'd invested in Asian or European companies, Professor.

[Professor Fate]

Sorry Omar, same answer. You're trying to compare 8 years of Obama to 1 year of Trump.

Secondly, your graph doesn't show all of 2017 to date. It's now almost 24,000, not 21,000 like your graph shows.

Nice Try though Omar.

[John Q. Public]

As are you. And you're pointing to an under-performing market as your example.

[Professor Fate]

And, the arrow should point to 18, 332.26 which is what it was when Trump was elected on that glorious day, November 8 2016.

[John Q. Public]

Or three years earlier when it first moved into record territory. Fact is, he inherited a long-term bull market that's continued either because of him or in spite of him. And considering that all of the major foreign markets except the UK's (and they've had their own little issues) have out-performed the Dow, I think I'll go with the latter.

[Omar Bongo]

You're trying to compare 8 years of Obama to 1 year of Trump

And you're counting Nov. 2016 - Jan. 2017 twice...is that Trump University math?

[Professor Fate]

I am not. 18,332.26 on Nov 8, 2016. And 23,836.71 now.

[Wabash]

He didn't take office till Jan. 20, 2017. His first budget didn't take effect till Oct. 1, 2017. So those gains you tout are the result of Obama era policies.