
By Matthew Burnell
As we approach the 2024 presidential elections many people are wondering will this election have a major impact on the economy and markets? You may have heard the expression: Don’t let how you feel about politics overrule how you think about investing. According to the Pew Research Center, they ran a study asking subjects to rate economic conditions as good or excellent over time. It was no surprise that Republicans rated economic conditions more favorably when a Republican was President and Democrats rated the economic conditions more favorably when there was a Democrat as president.
Looking at just the last four presidents and the S&P 500 performance, during President Obama’s eight-year term the S&P returned 16.3% and President Trump’s term the S&P returned 16%. President Biden’s term through August of this year the S&P 500 had returned 12.5% and going back to 2001, President Bush’s term saw S&P 500 returns at -4.5% over that period. President Bush began his term during the dot com bubble and ended during the subprime mortgage crisis. Coming out of this crisis President’s Obama and Trump were in charge during a historically postive market run, while as President Biden stepped into office during the Covid pandemic. So, there were certainly some large economic factors that greatly affect the Stock market regardless of which party was in power.
Regardless of who the winning party is, crucial to a president’s success in implementing their agenda is the configuration of Congress, comprised of the Senate and House of Representatives. In the long run, it is policy, which matters more for the economy and markets. It is often the case that rhetoric about policy differs from actual policy implemented once elected.
Monetary policy, fiscal policy, economic growth, labor markets, and corporate profits are likely better areas to focus on when thinking of market performance. Focusing on two areas, Fiscal and Monetary policy are likely key agenda items for both parties.