Stocks don’t care who is America's president
People often assume that the traditionally business-friendly Republicans would be better for equities than the Democrats. Yet, that's not necessarily the case.
Finance pundits have started assessing the potential impact of presidential candidates on the American stockmarket. People often assume that the traditionally business-friendly Republicans would be better for equities than the Democrats. Yet the Dow Jones index gained an average of 82.7% under Democratic presidents between 1901 and 2014, compared to 44.8% under Republicans, says Myles Udland on UK.BusinessInsider.com.
Still, there is far less to this than meetsthe eye. Stocks usually go up anywayand correlation is hardly causation."The broader economy is part of a massive set of forces, much of which is typically beyond the White House's ability to deal with," says Barry Ritholtz on Ritholtz.com.
Occasionally, presidents add to tailwinds Reagan's tax-cutting came on top of the Federal Reserve's defeat of inflation in the early 1980s, for instance but they don't usually create them. The Republicans were unlucky to have presided over the Depression, while President Obama is fortunate to have such a supportive central bank. When the talk turns to presidents and stockmarkets, tune out.