What you expect from Stock Market in Trump's first Year
Pundits say it all the time. Donald Trump is not like any ordinary Republican president. That may prove to be a good thing for the stock market in 2017.
That's because stocks have underperformed in the first year of Republican presidents most of the time, according to CFRA data.
The S&P 500 has been down two-thirds of the time in the first years of all Republican presidential terms since World War II, whether it was the first or second term. The index, in those years, averaged a 1.8 percent decline.
That compares with big first-year gains in Democratic terms. The S&P 500 averaged a 17 percent first-year advance, and the market was up 89 percent of the time in the first year.
As for Republicans, the performance was even worse when it was the first year of the first term of a GOP president. In those five instances, the S&P 500 was only up once and the average loss was 2.7 percent.
Wall Street strategists certainly are not forecasting a decline in stocks for 2017, and many see the S&P 500 between 2,300 and 2,400 next year. A few, like RBC's Jonathan Golub see the S&P reaching 2,500 by year-end. The S&P 500 was just under 2,250 on Thursday.
Sam Stovall, CFRA's chief investment strategist, said the theory has been that Republicans inherited a mess made by Democrats, but instead it may be a matter of timing. Every Republican president since Teddy Roosevelt has had a recession in their first term. Richard Nixon and George W. Bush had two while in office.
