Biden, the largest increase in the stock market from election to inauguration
Market attention such as smooth vaccine distribution and economic indicators
Coordination tasks such as cooperation with the Republican Party for stimulus measures
The US stock market this week is expected to move in line with the inauguration of President-elect Joe Biden and the earnings season of US companies.
On the 15th (local time), CNBC reported that Biden-elect will enter the White House on the back of the biggest stock market heat blow since 1952.
According to a US market research firm CFRA survey, the Standard & Poor’s (S&P) 500 index increased by 13% since the presidential election on November 3 last year.
If such a strong trend continues until the 20th, the day of the inauguration ceremony, Biden will become the president with the largest stock market rise among all the US presidents.
So far, the 8.8% increase at the time of former President John F. Kennedy was the highest. Dwight Eisenhower 6.3% and Donald Trump 6.2% followed.
●Biden administration, honeymoon rally difficult?
Even if President-elect Biden takes office, observations have been made that it is difficult to expect a so-called’honeymoon’, which means political confinement for a certain period of time at the beginning of his term.
Currently, the cumulative number of coronavirus cases in the United States has exceeded 25 million, and the number of deaths has also reached 400,000.
It is evaluated that the spread of the coronavirus is not slowing down, and vaccination is also delayed, making it difficult for the new government to solve.
A large-scale additional economic stimulus card worth $1.9 trillion has been released, but the market is paying attention to how well Biden’s new administration will cope with the pandemic such as smooth vaccine distribution.
● Slow economic indicators, negotiations with the Republican’touch sense’
The US stock market on the last trading day of last week fell on sluggish economic data despite Biden’s announcement of additional stimulus measures.
Quincy Crosby, chief market strategist at Prudential Financial, said he was concerned about a weakening economy, citing sluggish economic data. Retail sales in December fell 0.7% from the previous month, and the number of weekly new unemployment benefits was also the highest since August.
Along with this, he emphasized that (the scale of the stimulus package) starts at $1.9 trillion and pays attention to the future trends of where the negotiations will go. In the process of negotiating with the Republican Party, Biden’s stimulus package could be reduced.
The Democratic Party won the Georgia Senate Final on the 5th and added the casting boat of Vice President Camela Harris to become the majority party, overtaking the 50-seat Republican Party.
However, to pass Biden’s massive stimulus bill safely, 60 votes are needed, and some Republican lawmakers must support it.
● Strong stock market in the early days of the Democratic Party
Historically, the stock market has often been strong in the early days of the Democratic Party.
During the 100 days of the Democratic Party since 1952, the average share price increase of the S&P 500 index was 3.5%. On the other hand, the Republican Party rose only 0.5% on average over the same period.
In terms of the post-World War II period alone, the S&P 500 index rose 11.3% in the first year of the Democratic Party’s rule, but only 5.7% in the first year of Republican rule.
Meanwhile, the New York Stock Market opens the week with a closure on the 18th on Martin Luther King’s Day.
From the 19th, big companies such as Bank of America, Goldman Sachs, IBM, Procter & Gamble are expected to announce their earnings in the fourth quarter of last year.
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