Following up from last week’s post, a reader wrote that it would be more realistic to compare how the broader stock market performed under Trump than under previous presidents. Frankly, I don’t see the value of this exercise. As I stated in my last post, I believe that at best a president can only indirectly influence market performance. So whatever the market does during presidential cycles has no useful predictive power. But since this seems to interest at least one reader, here is the compound S&P 500 performance during the first two years of presidential reigns going back over the last 40 years (data from Dimensional Fund Advisors).

Trump (2017-2018): 16.4%
Obama (2009-2010): 45.6%
Bush (2001-2002): -31.4%
Clinton (1993-1994): 11.5%
Bush (1989-1990): 27.4%
Reagan (1981-1982): 15.5%
Carter (1977-1978): -1.1%

If you’re a Trump hater, you’ll likely observe that the stock market performance under Obama’s first two years trounced its performance under Trump. If you’re a Trump lover, you’ll probably gloat that the stock market during his first two years had the best performance (presuming that Trump’s supporters, like Trump, don’t let facts get in the way of their beliefs).

Is there anything we can take away from these numbers? Did Obama have it easier because the market had plunged so deeply the year before he took office? Did Trump have it easier because the growing economy under Obama had reached peak performance the year after he left office? This is nothing more than speculation and bar talk. I will say this, however. If Trump shuts down the U.S. government again, or escalates his trade wars with other countries, or threatens war with a country like Iran, the economic uncertainty as a result of those actions could trigger negative stock market consequences worldwide.