Despite an army of critics opposing him at every turn, US President Donald Trump managed to get his tax overhaul bill through Congress and onto his desk on December 22. Hours later, the president signed the bill, marking the first major legislative victory since he took office almost a year ago.
It was a hard-fought victory, and one that will likely keep Trump’s stock market surge humming along as it has since he won the 2016 election.
But just how well has the stock market performed since The Donald took office?
Pretty darn well.
Let’s look at how he stacks up against previous presidents.
First of all, stocks have risen in nine of the first ten months Trump has been president, a record no former US president can match. To find any other president that comes close, you need to go back to William Howard Taft, Harry Truman, Lyndon Johnson, and John Kennedy—all of whom enjoyed eight up-months in their first 10.
Additionally, if we compare the performance of the S&P 500 during President Trump’s first 11 months in office against the five presidents that preceded him, only Barak Obama and George H.W. Bush (just barely) saw a faster rate of growth during the same period.
Trump’s stock market surge is real and can’t be ignored.
According to the chart below, in Trump’s first 11 months in office, the S&P 500 grew at a steady rate of 18 percent, just 1.8 percentage points less (19.6%) than during H.W. Bush’s first 11 months in office back in 1989. In fact, stock market growth during Trump’s first year dwarfs the growth recorded during Bill Clinton’s first 11 months (7.5%), while presidents Reagan (-5.8%), Carter (-10.2%), and Bush II (-15.1%) all presided over a period that saw fairly steep declines in S&P growth. Only during President Obama’s first year in office back in 2009 did the S&P 500 grow more robustly (36.9%)—and that was when the economy was starting to recover from the massive stock market downturn that began in 2008.
Since Election Day 2016, The Dow has surged 28.5%, which is good for fourth-best in US history. For perspective, you have to go back to Franklin Roosevelt and his successor Harry Truman in 1945, when the Dow gained nearly 30% to match that kind of first-year performance, noted Matthew Rocco in a November article in Fox Business.
Historically, the Dow grows about 6% on average in the year following a presidential election. However, stocks typically perform better under Republican presidents. If we compare the figures, the Dow gains on average about 8.03% with a Republican in office. If we contrast that with the 3.55% the Dow gains on average in the first year after a Democrat takes office, it becomes clear which party is better for the stock market.
Of course several US presidents have enjoyed strong bumps in the stock markets in their first years, only to fall off shortly thereafter. In fact, according to Forbes, both Lyndon Johnson and John Kennedy ended up with below-average stock market performances after initially posting strong numbers.
The difference between Trump’s stock market surge and those of previous presidents, however, is that he and his administration will head into 2018 on a powerful wave thanks to the massive tax reform legislation signed into law in December. The tax reform which reduces corporate tax rates significantly, which should be turbocharge the US economy. Combined with rising consumer confidence and other business-friendly policies we are likely to see from the Trump administration in the New Year also bode well for The Donald heading into 2018.