Dec 26, 2019

S&P 500 doubled its average return under past presidents during Trump's first 3 years

Photo: Nicholas Kamm/AFP via Getty Images

The S&P 500 has had a return of over 50% during President Trump's first three years in office, more than doubling the average return of 23% at the same point in a presidential term since 1928, CNBC reports.

The big picture: The market, which hit record highs across the three major indices, got a sustained lift in 2019 after Federal Reserve Chair Jerome Powell lowered interest rates three times, the first such moves since the end of the financial crisis.

  • The big gains under Trump come despite a volatile 2018 that saw the S&P drop 6.2%, thanks to the uncertainty of the U.S.-China trade war.
  • And by another market's measure, there were worrying signals: the yield curve inverted this year, a phenomenon in the bond market known to precede recessions.

Of note: The S&P's 28.6% growth during Trump's third year lagged behind former President Barack Obama's 32% during his third year, which came as the economy recovered from the financial crisis.

What to watch: The S&P increases two-thirds of the time in a president's fourth year — with an average gain of 5.2%.

  • For Trump, any success will likely depend on how trade talks with China play out — and whether his "phase one" trade deal can hold.
  • As part of some of the known terms of that deal, China agreed to buy billions of dollars of U.S. agricultural products and Trump agreed to cancel pending tariff increases.

Go deeper ... Trump: "The reason our stock market is so successful is because of me"

Go deeper

2019 stock market gains still leave Trump behind his predecessors

Data: FactSet; Chart: Axios Visuals

The S&P 500 has jumped 42% under President Trump — according to market data from the inauguration through 2019's final day of trading.

Why it matters: Trump uses the stock market's surge as a barometer of his presidency's success — one that, along with the 50-year low unemployment rate, he's sure to continue to tout as the 2020 election approaches — but the gains under him lag those under former Presidents Barack Obama, when stocks rebounded from the lows of the financial crisis, and George H.W. Bush.

The "phase one" deal isn't all that it seems

Vice Premier Liu He and President Trump after signing phase one Wednesday. Photo: Mark Wilson/Getty Images

There was limited fanfare from the stock market after President Trump and Chinese Vice Premier Liu He signed the "phase one" trade deal yesterday.

What happened: The 94-page document will roll back some U.S. tariffs on Chinese goods and see China increase purchases of U.S. goods and services by $200 billion over two years, but it leaves more questions than answers, experts say.

Go deeperArrowJan 16, 2020

Trump says he'll sign "phase one" trade deal with China on Jan. 15

President Trump tweeted Tuesday that he will sign the "phase one" trade deal with China in a ceremony at the White House on Jan. 15.

The intrigue: Trump did not indicate that Chinese President Xi Jinping would be in Washington for the occasion, saying that "high level representatives" would be present instead. Reports earlier this week indicated that Vice Premier Liu He, China's top trade negotiator, would be the one to sign on behalf of China.

Go deeperArrowDec 31, 2019