Richard Tafoya
Jan 19th, 2009, 03:08 PM
CNN:
http://money.cnn.com/2009/01/19/markets/market_firstyear/index.htm
Optimism about Barack Obama's first 100 days as president is running high, but Wall Street's post-inaugural celebration may well be short-lived."I think there's going to be something of an Obama honeymoon for a few weeks," said Terry L. Morris, senior equity manager at National Penn Investor Trust. "But I think there's still a lot of pessimism out there about the economy."
Since 1932, stocks, as measured by the S&P 500, have gained an average of 1.6% in the first 100 days of a new president's term regardless of the party. The S&P 500 has gained 0.9% on average under a Republican president and 2.2% under a Democrat like Obama, according to research by Standard & Poor's chief investment strategist Sam Stovall.
While a gain is a gain, a 2.2% rise following a year in which the S&P 500 lost 38% - and saw its worst year (http://money.cnn.com/2008/12/31/markets/markets_newyork/index.htm#2008) since the 1930s - does not suggest the rallying cry of a new bull market.
In fact, Wall Street could very well see the same market reaction that briefly followed both the November election and the start to 2009, said Joe Arnold, wealth manager at Dawson Wealth Management.
"Both times, the optimism had an emotional effect on the stock market for a few days or weeks," said Dawson. "But then the happiness wore off and people returned to the reality that we are still in this crisis and we don't know when it's going to end."
History favors the Democrats: Similar to the first 100 days, stocks tend to perform better for the rest of the year when the Democrats are in power, according to S&P. In the subsequent eight months, stocks on average lose 7.7% under Republicans and gain 4.8% under Democrats going back to 1932.
http://money.cnn.com/2009/01/19/markets/market_firstyear/index.htm
Optimism about Barack Obama's first 100 days as president is running high, but Wall Street's post-inaugural celebration may well be short-lived."I think there's going to be something of an Obama honeymoon for a few weeks," said Terry L. Morris, senior equity manager at National Penn Investor Trust. "But I think there's still a lot of pessimism out there about the economy."
Since 1932, stocks, as measured by the S&P 500, have gained an average of 1.6% in the first 100 days of a new president's term regardless of the party. The S&P 500 has gained 0.9% on average under a Republican president and 2.2% under a Democrat like Obama, according to research by Standard & Poor's chief investment strategist Sam Stovall.
While a gain is a gain, a 2.2% rise following a year in which the S&P 500 lost 38% - and saw its worst year (http://money.cnn.com/2008/12/31/markets/markets_newyork/index.htm#2008) since the 1930s - does not suggest the rallying cry of a new bull market.
In fact, Wall Street could very well see the same market reaction that briefly followed both the November election and the start to 2009, said Joe Arnold, wealth manager at Dawson Wealth Management.
"Both times, the optimism had an emotional effect on the stock market for a few days or weeks," said Dawson. "But then the happiness wore off and people returned to the reality that we are still in this crisis and we don't know when it's going to end."
History favors the Democrats: Similar to the first 100 days, stocks tend to perform better for the rest of the year when the Democrats are in power, according to S&P. In the subsequent eight months, stocks on average lose 7.7% under Republicans and gain 4.8% under Democrats going back to 1932.