In his first 100 days as president, Donald Trump may have found much of his agenda stymied, like a healthcare overhaul and a hotly contested immigration order.
But he can at least point to the biggest stock market rise of any president since the 1980s.
US President Donald Trump has both played down and embraced the significance of the 100-day period. Photo: KIICHIRO SATO
In Trump’s first 100 days, the Standard & Poor’s 500-stock index has risen about 5 percent, in what supporters have called a “Trump bump”.
Only George Bush enjoyed a bigger stock market rise, with the index gaining 7.7 percent in his first 100 days as president in 1989 amid a 15-year low in unemployment and efforts to shore up the battered savings-and-loan industry.
By comparison, in Barack Obama’s first 100 days in the White House, the S&P rose 2.8 percent. Under George W. Bush, it fell 7.3 percent. Under Bill Clinton, it rose 0.9 percent. Under Ronald Reagan, it fell 1 percent.
Like most presidents in the modern era, Trump has both played down and embraced the significance of the 100-day period by which new White Houses have been judged since Franklin D. Roosevelt. He dismissed the 100-day milestone as a “ridiculous standard” even as his administration sought to push through a final flurry of actions meant to improve his report card.
Much of the markets’ movements arises from circumstances beyond any president’s control. When Obama took office in early 2009, the country was still grappling with the fallout of a global financial crisis that had mired the economy in deep recession.
And the younger Bush assumed the presidency amid the bursting of the dot-com bubble, which wiped out scores of internet stocks.
But from the moment that Trump won the 2016 election, analysts and bankers predicted a bump in the S&P, based in part on the promises of an overtly business-friendly presidency. He has pledged to lift regulations that he said were stymieing private enterprise, while ushering in both big tax cuts and greater infrastructure spending.
Since taking office, Trump has made good on some of those promises, lifting regulations on the financial and energy industries while appointing government officials inclined to look more favourably upon business. The White House tax proposal this week called for a drastic cut to corporate taxes.
And still, much of what has happened is because of factors beyond the administration’s promises and control, according to Erik Knutzen, the multi-class asset chief investment officer at Neuberger Berman.
While Trump has asserted that he “inherited a mess” from Obama, the economy that he took over has shown some fundamental resilience: a 10th year of economic expansion, stock markets at historical highs and low interest rates.
Much of the improvement in market indexes of late, Knutzen said, came from strong corporate earnings in the first fiscal quarter of the year – which the new administration would have had little to do with.
“I think most of the movements in the markets in the last 5½ months are much more associated with improvements in global economies,” Knutzen said.
On Friday, the Standard & Poor’s 500-stock index fell 4.57 points, or 0.2 percent, to 2,384.20. The Dow Jones industrial average gave up 40.82 points, or 0.2 percent, to 20,940.51. The Nasdaq composite lost 1.33 points, less than 0.1 percent, to 6,047.61.
It is unclear where the markets go from here. The Federal Reserve has signalled that it expects to continue raising interest rates in the interest of sustaining what its chairwoman, Janet Yellen, called “a healthy economy”.
And the path forward for Trump’s tax cut proposal is murky. What was unveiled Wednesday so far holds great promises for corporate America, from slashing the business tax rate to 15 percent to a one-time tax holiday for companies to bring back trillions of dollars in profits earned overseas. Whether the White House can win support from Congress remains an open question.
Then there are questions about Trump’s trade positions and foreign policy, as he signals a continued willingness to walk away from NAFTA while maintaining his hard-line stance on North Korea.
So far, markets have experienced less up-and-down whipsawing from uncertainty, Knutzen said. But he cautioned that this may not last.
“While that’s possible, from a prudence standpoint, I think it’s better to assume volatility will increase,” he said.