President Trump is very proud of the post-election surge in the stock market. He’s been fairly quiet on Twitter recently, but he made an effort Thursday morning to make sure people knew how well the economy has been doing of late.
These aren’t actually jobs, yet, of course, but Trump does like to stay on brand.
So how good have things been? Pretty good indeed.
Since Election Day — or, actually, since a day or two before Election Day — the Dow Jones industrial average has been pushing steadily upward. There was a strong run in the spring of 2016, too, but since Nov. 8, the increase has been fairly dramatic.
How dramatic? As we’ve noted before, it’s second only to the surge experienced after the election of Herbert Hoover. (At one point, Trump was actually doing better than Hoover, but that’s no longer the case.) Ahem: Asterisk one.
The surge after the election of Trump — a span of 76 days during which the markets were open — compares particularly favorably to what happened after Barack Obama won in 2008. Of course, that election took place during the Great Recession, so it’s tricky to assign fault to Obama. That’s the tough question at the heart of this, of course. Trump (and Treasury Secretary Steve Mnuchin) have linked stock performance to confidence in Trump’s election and presidency, but it’s not clear how much credit is due where. For the sake of argument, though, let’s allow Trump the credit for this recent increase — and Obama the credit for the 76-day run ending on June 1, 2016, in which markets rose 13.6 percent. Asterisk two.
Of all of the 76-day runs in the history of the Dow, the past 76 days are in the 93rd percentile, ranked 2,244th out of 31,186. If we consider only the period after the year 2000, it’s better: 98th percentile, and 83rd of 4,317.
Post-1900, though, there have been a lot of 76-day runs that have been far bigger than what we’re seeing now. The biggest ended only July 3, 1933 (though a lot of other days in that time frame had similar growth metrics). October 1915, April 1975, December 1904, June 1938 — even more recent dates like July 30, 1997 and June 25, 2009, saw bigger runs than we’ve seen since Election Day.
But on that admittedly arbitrary timeline, the Trump run has been very impressive.
Now let’s deal with those asterisks.
The market expanded dramatically after Hoover won election in 1928 — and then dipped a bit in October 1929. By “dipped a bit,” we of course mean “crashed so badly that the country entered the Great Depression.”
The other asterisk to all of this is Trump’s willingness to take credit for the Dow right now. If we look at the 76 days after the dates above, the market usually kept climbing. But not always. In 1997 and 1933, the following 76 days saw the markets drop. In 1933, it dropped precipitously and then rebounded.
Trump is welcome to celebrate the gains the market has seen over the past few months. But it seems politically iffy to embrace the status of the Dow as a report card on his job effectiveness. The Dow could go up forever, just as the roulette wheel could keep landing on double zero. But it’s not going to.
It will be interesting to see what Trump tweets then.