After 100 Days, Trump’s About Average

I knew cycles existed, but I never gave it too much thought that they could really be predicted — until this calendar proved that it’s possible.

Presidents get their first report card after 100 days. This is often a busy time. Major legislation is proposed, and sometimes it’s acted on.

The stock market usually doesn’t care. On average, the Dow Jones Industrial Average gains about 3% in the first 100 days.

There are a few exceptions. The Dow soared 75% when President Franklin Roosevelt took office during the Great Depression. The next big gain came when President Richard Nixon promised to end the Vietnam War. Stocks soared 30% in Nixon’s first days. His successor, President Gerald Ford, oversaw the largest loss. The Dow fell 16.7% when investors wondered if Ford was up to the task.

The table below shows how the Dow responded to the first 100 days of each president since 1900.

Postelection rallies are common. They reflect hope. Performance in the first 100 days reflects reality. And President Donald Trump’s first 100 days are average.

(Source: LPL Research)

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Ignoring the outliers, President Donald Trump’s first 100 days are average. However, the first 100 days miss Trump’s postelection rally.

But postelection rallies are common. They reflect hope. Performance in the first 100 days reflects reality.

In a president’s first term, returns average about 7% a year. Gains of that size would give us Dow 29,000 during Trump’s first term.

However, we’re in the beginning of a bull market that might eventually see the Dow reach 50,000 or higher. Now could be the time for aggressive strategies.

Regards,

Michael Carr, CMT
Editor, Peak Velocity Trader

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